final.Eric Adams‑Backed NYC Token Hit by Rug‑Pull Allegations After $2.5 M Liquidity Withdrawal
By [Your Name] – Jan 28 2026
A newly launched meme‑style token tied to New York City’s mayoral office has become the focus of a nascent controversy after on‑chain data showed a sizeable liquidity pull that left investors scrambling. The episode has reignited debate over the risks of political endorsement in the cryptocurrency space.
Quick facts
| Item | Detail |
|---|---|
| Token | $NYC (NYC Token) |
| Launch venue | Times Square, Manhattan |
| Initial valuation (24 h) | ~US$580 million (fully diluted) |
| Current price (≈ $0.134) | ~US$134 million market cap |
| Liquidity removed | Roughly US$2.5 million in USDC |
| Liquidity re‑added | About US$1.5 million (leaving ~US$0.9 million missing) |
| Red flag | Rugcheck.xyz warns of potential market manipulation |
What happened?
The token was unveiled during a high‑profile event in Times Square on Monday, where former mayor Eric Adams framed the project as a vehicle to combat antisemitism and “anti‑Americanism,” while also promoting blockchain education for younger New Yorkers. The official website describes the initiative as a community‑driven effort, and the launch generated immediate hype, pushing the price to a peak that implied a fully‑diluted valuation of roughly US$580 million.
Within hours, market observers spotted an abrupt withdrawal of liquidity from the token’s primary USDC pool. On‑chain analytics traced the removal to a wallet that appears to be associated with the token’s deployer. The pull amounted to approximately US$2.5 million, causing the token’s price to tumble more than 60 percent. A later transaction added back about US$1.5 million, yet the pool still retained a shortfall of roughly US$900 000, according to blockchain data aggregators.
CoinGecko, which now flags the token with a warning from Rugcheck.xyz, highlighted a concentration risk: a single or a handful of unidentified wallets control a disproportionate share of the total supply and liquidity, raising concerns about potential manipulation.
Official response
Late Monday night, the token’s official X account posted that “partners rebalanced the liquidity” after the surge in demand at launch. The message acknowledged the reports of a liquidity drain and asserted that the subsequent deposits were intended to stabilize the market.
Despite the statement, several community members noted that the pool’s depth remained abnormal. Nicolai Sondergaard, a research analyst at Nansen, commented that the pattern “fits the classic definition of a rug pull.” He argued that a legitimate rebalancing would typically be announced in advance and would involve adjusting price ranges rather than fully extracting liquidity and re‑depositing a portion later.
Sondergaard added that the temporary removal effectively forced many traders to sell into a thin market, cementing losses that cannot be fully recovered by later liquidity injections. He described the follow‑up deposits as a “band‑aid” that does not erase the damage inflicted on early participants.
Market reaction
The token’s price settled around $0.134 after the episode, corresponding to a market cap of roughly US$134 million—still a substantial figure for a token that launched less than 24 hours ago. However, the volatility has left many retail investors wary, and the incident has sparked broader conversations about the responsibility of public officials when endorsing crypto projects.
Analysis
- Liquidity concentration is a red flag – The fact that a single address could extract a multi‑million‑dollar pool highlights the systemic risk inherent in many meme‑coin deployments, especially those backed by high‑profile figures.
- Political hype accelerates price spikes – Adams’ involvement drove immediate media coverage and speculative buying, inflating the token’s valuation in a matter of minutes. This demonstrates the power of celebrity endorsement in the DeFi arena, but also the volatility that follows.
- Post‑event rebalancing provides limited relief – Even when liquidity is partially restored, the damage to price discovery and trader confidence can be irreversible. The incident underscores the need for transparent liquidity management policies.
- Regulatory scrutiny may increase – While the token is not a security in the traditional sense, the involvement of a former mayor could attract attention from state regulators who are already probing political use of crypto assets.
Key takeaways
- On‑chain monitoring matters: Tools that trace liquidity movements can quickly surface questionable activity, allowing the community to react faster.
- Endorsements are not guarantees: A public figure’s support does not eliminate the inherent risks of speculative tokens, especially those lacking transparent governance.
- Liquidity management practices matter: Transparent, pre‑announced adjustments are preferable to abrupt, opaque withdrawals that can be interpreted as a rug pull.
- Investors should watch concentration metrics: High wallet concentration combined with low liquidity depth is a classic warning sign for potential manipulation.
The NYC token episode serves as a cautionary tale for both creators and investors in the fast‑moving world of decentralized finance. As the market continues to digest the fallout, industry participants are likely to call for clearer standards around token launches that involve public officials.
Source: https://thedefiant.io/news/markets/eric-adams-backed-nyc-token-rocked-by-rug-pull-allegations
