In brief
- Former New York City Mayor Eric Adams launched the NYC token, claiming it would fund charitable causes.
- The token surged to a nearly $600 million market cap before crashing to over $1oo million.
- A wallet linked to the token deployer removed $2.43 million in USDC liquidity, added back $1.5 million, leaving $932,000 unaccounted for.
A wallet linked to former New York City Mayor Eric Adams’ newly launched crypto token allegedly pocketed nearly $1 million through suspicious manipulation of a liquidity pool on Monday.
The creator of the NYC token sent 80 million coins to an account that added the tokens as liquidity on a decentralized exchange.
That account then removed $2.43 million in USDC before adding back $1.5 million, leaving approximately $932,000 in unaccounted-for USDC liquidity, on-chain analytics platform Bubblemaps confirmed to Decrypt on Monday.
The episode comes amid growing scrutiny of politician-backed cryptocurrencies, including meme coins, following last year’s collapse of the LIBRA token promoted by Argentine President Javier Milei, which led to fraud and racketeering class-action lawsuits.
Bubblemaps also identified the suspicious activity, reporting that wallet 9Ty4M, associated with the NYC token deployer, created one-sided liquidity pools on Meteora.
“This wallet then: removed ~$2.5M USDC at the peak, added back ~$1.5M USDC after a -60% drop,” Bubblemaps reported.
“There has been no explanation for these liquidity moves,” Bubblemaps tweeted. “This is unfortunately reminiscent of the $LIBRA launch, where liquidity was also heavily manipulated.”
The former mayor announced the token at a Times Square press conference on Monday, saying the project would address “antisemitism and anti-Americanism” using revenue generated by the token, while also teaching children “how to embrace the blockchain technology.”
The NYC token has a maximum supply of 1 billion tokens, with it representing “the spirit of New York City—innovation, diversity, and the drive to succeed,” according to the token’s official website.
NYC surged to a $600 million market cap before crashing to around $110 million, according to Solscan data. The token’s price has fallen by more than 81% from a peak of around $0.58 to just $0.11, data shows.
“After the launch of NYC Token, there was a lot of demand,” said Adams in a statement provided to Decrypt. “Our market maker made adjustments in an attempt to keep trading running smoothly, and as part of this process, moved liquidity. The team has not sold any tokens and are subject to lockups and transfer restrictions. We are focused on being transparent and building for the long term.”
Adams’ comment is similar in tone to one posted on X late Monday, which noted “overwhelming support and demand” for the token, along with plans to “be in it for the long haul.”
Political disasters
President Milei’s LIBRA token scandal led to frozen assets, investigations into fraud, and class-action lawsuits.
Only 14% of LIBRA investors turned a profit, while 86% of those who invested in the token lost a combined $251 million, according to a report by Nansen.
Court filings in a U.S. class action lawsuit later named Meteora co-founder Benjamin Chow as the mastermind behind at least 15 token launches following an “identical blueprint,” including the high-profile MELANIA and LIBRA tokens.
The lawsuit alleges that First Lady Melania Trump and President Milei were used as “props to legitimize” what prosecutors describe as coordinated liquidity traps.
The MELANIA token, promoted by the First Lady just two days after President Trump’s own meme coin debut in January, surged to a near-$7 billion market cap before collapsing by 99% to $80 million over the following months.
In November, an Argentine judge froze assets relating to the LIBRAsc andal after investigators discovered potential “indirect payments to public officials” by Kelsier Ventures CEO Hayden Davis.
Bubblemaps linked wallets used to launch MELANIA and LIBRA, revealing a pattern of coordinated manipulation.
Editor’s note: This story was updated after publication to include comment from Adams and include an X post from the official token account.
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Source: https://decrypt.co/354377/eric-adams-nyc-token-crashes-amid-liquidity-extraction-allegations
