The NYC Token Crash: Allegations Of Rug Pull After $2.5 Million Liquidity Withdrawal

Overview

The NYC Token, a cryptocurrency launched by former New York City Mayor Eric Adams, has experienced a dramatic decline in value shortly after its introduction. Initially valued at a market cap of $580 million, the token has since plummeted to around $133 million due to concerns over liquidity withdrawals and allegations of a potential rug pull.

What Happened

The launch of the NYC Token was marked by excitement, as Eric Adams claimed in a promotional video that the token would “change the game” and “take off like crazy.” However, this excitement quickly turned to disillusionment as the token’s value dropped significantly. Investigations revealed that a wallet linked to the development team withdrew approximately $2.5 million in liquidity during the token’s peak.

While $1.5 million of this amount was returned after the token’s value fell by 60%, around $900,000 remains unreturned. This situation has sparked outrage among investors and users, leading to accusations against Adams of orchestrating a rug pull. This term refers to a situation where developers withdraw liquidity from a project, leaving investors with a worthless asset.

Adams had previously stated that funds generated from the NYC Token would be allocated to nonprofits aimed at combating antisemitism and anti-Americanism, as well as educational initiatives focused on blockchain technology. However, the details surrounding the token’s launch have raised questions, especially regarding the identities of the team members involved. The NYC Token’s official website indicates a total supply of one billion tokens, with 10 percent of profits designated for team activities.

NYC Token Team Responds

In light of the backlash, the NYC Token team has acknowledged the liquidity withdrawal, asserting that it was necessary due to the “overwhelming support and demand for the token at launch.” They expressed their commitment to the project, stating, “We’re in it for the long haul!” Despite this reassurance, uncertainties remain regarding the specifics of the token’s launch, particularly concerning the recently listed entity C18 Digital, which is associated with the NYC Token. Records show that C18 Digital was incorporated on December 30, 2025.

It is worth noting that typical cryptocurrency launches involve developers creating a liquidity pool using various assets. However, the NYC Token opted for a one-sided liquidity pool comprised solely of the token itself. As users purchased the token, they contributed liquidity through USDC, which was followed by the controversial $2.5 million withdrawal. This strategy, as described by analyst Vaiman, can be perceived as more subtle than direct sell-offs.

In response to the allegations, an account associated with the NYC Token announced that additional funds had been injected into the liquidity pool, potentially to address the concerns raised by investors.

From Author

The swift rise and fall of the NYC Token encapsulate the volatility often associated with cryptocurrency markets. The allegations of a rug pull highlight the risks investors face when engaging with new projects, particularly those lacking transparency. As the situation unfolds, it will be crucial to monitor how the NYC Token team addresses investor concerns and whether they can restore confidence in their project.

Impact on the Crypto Market

• The NYC Token’s crash underscores the inherent risks in launching new cryptocurrencies, especially those without clear transparency.
• Allegations of a rug pull can lead to increased scrutiny from investors and regulators, impacting future projects.
• The situation may deter potential investors from engaging with new cryptocurrency launches in the immediate future.
• The incident could provoke discussions around the need for regulatory frameworks in the crypto space to protect investors.
• The response from the NYC Token team will be critical in determining the project’s long-term viability and reputation within the crypto community.