A small, gray warning label appeared beneath a post on the social media platform X, attached to the verified account of a man who, until very recently, ran the largest city in America. It wasn’t a correction about sanitation budgets, subway schedules, or city zoning laws. It was a user-generated flag using a phrase usually reserved for anonymous internet scammers, alerting the public that Eric Adams might have just pulled the digital carpet out from under his supporters while the digital ink on his announcement was barely dry.
- NYC token launched January 12, losing 81% value quickly.
- Creators removed $2.5 million from the liquidity pool.
- Top five wallets controlled 92% of the token supply.
On January 12, roughly two weeks after leaving the mayor’s office, Eric Adams stood in Times Square to announce his latest venture. It wasn’t a memoir or a consulting firm. It was a cryptocurrency called the “NYC” token. He promised that this digital coin would help fight antisemitism and fund education about blockchain technology. But within thirty minutes of the token going live, the value plummeted by 81%, wiping out millions of dollars in perceived value and leaving early buyers holding empty bags.
The mechanics of a crash
To understand how a former mayor’s project can lose nearly all its value in the time it takes to watch a sitcom, we have to look at how these tokens are actually sold. When you buy a stock, you are buying a share of a company through a regulated exchange like the New York Stock Exchange. When you buy a new cryptocurrency like NYC, you are usually buying it from a “liquidity pool” on a decentralized exchange.
Think of a liquidity pool like the cash register at a currency exchange booth in the airport. For the booth to work, it needs a pile of dollars and a pile of euros in the drawer. If you want euros, you put dollars in and take euros out. The price depends on how much of each currency is in the drawer.
In the crypto world, this “drawer” is just software. It holds the new token (NYC) and a stable currency, usually USDC (which is a digital token always worth $1 US). When people rushed to buy Adams’ token, they poured real dollars (USDC) into the drawer and took NYC tokens out. This made the price of the NYC token skyrocket.
However, digital sleuths—people who spend their days watching these transactions on the public record—noticed something alarming. A digital wallet connected to the creators of the token reached into that “drawer” and removed about $2.5 million of the stable cash. When you take the cash out of the drawer but leave the tokens, there is no money left for anyone else to cash out. The price collapses instantly.
The vanishing million
The creators didn’t just take the money and run immediately. They did something slightly more complex. After removing the $2.5 million, causing the price to crash, they later put about $1.5 million back. But if you do the math, that leaves a gap. Roughly $932,000 went missing in this “round trip.”
In the industry, this maneuver is often called a “rug pull.” It is exactly what it sounds like: investors are standing on the rug, feeling safe, and the creator yanks it out from under them, taking the value with them. The warning label on Eric Adams’ social media post was explicitly calling this out.
This wasn’t the only red flag. Data from Bubblemaps, a service that visualizes who owns what on the blockchain, showed that the ownership of the NYC token was dangerously concentrated. The top five wallets—digital accounts that hold the tokens—controlled 92% of the entire supply. One single wallet held 70%.
Imagine a poker game where one player starts with 92% of the chips before the cards are even dealt. If that player decides to cash out, the game is over instantly. In a healthy market, ownership is spread out among thousands of people. Here, the game was rigged from the start.
Real people, real losses
It is easy to look at these numbers as abstract “paper gains,” but real money changed hands. The blockchain—which is like a shared Google Doc that everyone can read but nobody can secretly edit—shows the carnage clearly.
One trader, whose identity is hidden behind a string of code, bought heavily into the hype. They executed five separate purchases totaling roughly $745,725. Less than twenty minutes later, as the price cratered, they sold everything they had left for $272,177. That is a loss of over $473,000 in less time than it takes to order a pizza. While we don’t know if this trader was a wealthy speculator or someone gambling their savings, the money is gone just the same.
At its peak, the “market cap” of the NYC token was estimated between $540 million and $600 million. But “market cap” in crypto can be a mirage. If I print one billion stickers, and I sell one sticker to my friend for $1, I can technically claim I have a “billion-dollar sticker company.” But if I try to sell the other 999,999,999 stickers, I will never find enough buyers at $1. The value exists only on paper until someone tries to cash out.
Why is this legal?
You might be wondering why the Securities and Exchange Commission (SEC) isn’t kicking down doors. The answer lies in a shift in how the government views these “memecoins.”
In February 2025, the SEC staff issued a statement that effectively categorized many of these tokens as entertainment rather than financial products. They are treated less like shares of Apple and more like baseball cards or lottery tickets. The logic is that people buy them for social interaction and culture, not as serious investments in a business enterprise.
This creates a gray area. While outright fraud is still illegal, the specific regulations that force companies to disclose their finances don’t always apply here. It leaves the safety of the buyer dependent on “anti-fraud enforcement” after the fact, rather than prevention before the launch.
New York State is trying to catch up. Proposed legislation aims to criminalize “rug pulls” specifically, defining them by how much of the supply the developers hold and whether they sell secretly. But for now, the rules are loose, and the risks are high.
The politician and the blockchain
This is not Eric Adams’ first dance with cryptocurrency. When he became mayor in 2022, he famously converted his first paycheck into crypto, fulfilling a pledge he made on social media. He spent years trying to brand New York as a hub for digital assets.
However, the launch of the NYC token places him in a different category. We have seen other political figures enter this space. Donald Trump, for instance, has been linked to crypto projects. But the difference, according to market observers, is in the mechanics. While other projects might see insiders selling slowly over time—causing a gradual decline—the NYC token experienced a catastrophic, immediate removal of liquidity.
The incident leaves a cloud over Adams’ post-political career. The stated goals of the token—fighting hate and funding education—are now overshadowed by a missing million dollars and a chart that looks like a cliff edge. Neither Adams nor the token’s official account has provided a detailed accounting for the missing funds, leaving the “community” he claimed to be building holding nothing but digital dust.
