Eric Adams Dismisses “Rug Pull” Allegations Linked to NYC Token Amid Significant Losses

Eric Adams Rejects “Rug Pull” Claims Tied to NYC Token Despite Big Losses

In recent news, former New York City Mayor Eric Adams has firmly denied claims that his newly introduced meme coin, NYC Token, is associated with questionable liquidity withdrawals, which have left investors facing substantial losses.

Key Takeaways:

Eric Adams refutes allegations of moving funds, attributing NYC Token's losses to early market fluctuations.
The project acknowledged temporary liquidity adjustments during its initial launch phase.
Onchain activity raised red flags regarding substantial withdrawals, leading to concerns of a potential rug pull.

In a statement posted on Tuesday via Adams’ X account, spokesperson Todd Shapiro asserted that claims suggesting Adams shifted money out of the NYC Token are “false and unsupported by any evidence.”

The spokesperson emphasized that Adams did not handle investor funds nor gain financially from the token’s launch, stating “no funds were removed from the NYC Token.”

NYC Token Team Attributes Early Volatility to Price Decline

Shapiro explained that the significant price fluctuations of the token are a common occurrence for early-stage cryptocurrency ventures.

“Similar to many newly launched digital assets, the NYC Token experienced market volatility,” he remarked, framing the situation as a market-driven phenomenon rather than a concerted withdrawal.

This response followed increased scrutiny of onchain activities related to NYC Token, which experienced a substantial drop shortly after its launch.

The project team admitted to liquidity adjustments, stating they needed to “rebalance” amid high demand.

On their X account, the team explained that partners temporarily withdrew funds for time-weighted average price execution and subsequently reinjected additional capital into the liquidity pool.

However, these clarifications have not satisfied critics. Independent analysts pointed out transactions that seemingly drained liquidity at peak prices, raising concerns among traders.

Rune Crypto was among the first to raise alarm bells, alleging that approximately $3.4 million in liquidity was withdrawn just after the token's launch, suggesting the project operated similarly to a rug pull.

Onchain visualization tool Bubblemaps also reported unusual transaction patterns.

Bubblemaps' analysis revealed that a wallet linked to the token deployer withdrew around $2.5 million in USDC near the top of the market and later reinvested approximately $1.5 million after the token's value had plummeted by over 60%.

Significant Losses for NYC Token Traders

Bubblemaps further illustrated the extent of trader losses. Out of about 4,300 participants, it is estimated that 60% found themselves in the red just hours after the token launched.

Most losses were under $1,000; however, around 200 traders faced losses ranging from $1,000 to $10,000. A smaller number of traders incurred losses totaling tens of thousands, with at least fifteen suffering more than $100,000 in losses.

Adams’ team has stressed that the NYC Token was designed as a means to support nonprofit initiatives and community education rather than as a speculative investment.

Nevertheless, this situation has raised significant transparency concerns related to governance and liquidity management.

The project’s website indicates that the token is based on the Solana blockchain, with a total supply of one billion tokens, 70% of which are reserved and not part of the circulating supply.

While the team has cited unnamed partners in their liquidity management actions, a detailed disclosure has yet to be published, leaving lingering questions regarding oversight and accountability.