Eric Adams Denies NYC Token Was a ’Rug Pull’—Despite Massive Investor Losses

New York City's crypto experiment just hit a wall—and Mayor Eric Adams is dodging the blame.

City Hall's official token, launched with promises of municipal innovation, has shed staggering value since its debut. Investors who bought early are staring at portfolios that look more like digital ghost towns than financial frontiers.

The Official Line vs. The On-Chain Reality

Adams insists the project was a good-faith effort to modernize city services. He calls accusations of a deliberate 'rug pull'—where developers abandon a project and run with the funds—baseless. The administration points to initial utility plans and partnership announcements as proof of intent.

But the blockchain ledger tells a colder story. Transaction histories show large, unexplained withdrawals from the project's treasury wallets coinciding with the price collapse. Community sentiment on crypto forums has turned toxic, with holders accusing the city of a 'taxpayer-funded exit scam.'

A Pattern, Not an Anomaly

This isn't just another altcoin crashing. It's a city government failing to grasp the fundamental covenant of Web3: trust is transparent, and it's built on code, not press releases. When a mayor promotes a token, it carries the weight of public institution—a weight that just crushed investor confidence.

The episode highlights the growing pain of civic crypto. The technology promises efficiency and engagement, but politics brings opacity and plausible deniability. It's the worst of both worlds: bureaucratic sluggishness paired with crypto-volatility. A classic case of a government trying to sprint in a marathon it doesn't understand the rules to.

So where does this leave municipal blockchain ambitions? In the cold. The NYC token debacle will be cited in every skeptical committee hearing for years. It's a gift to regulators itching to clamp down and a nightmare for serious builders trying to bridge real-world governance and decentralized networks.

The final irony? The city that never sleeps just put its entire crypto credibility to bed—proving once again that when traditional finance puts on a blockchain costume, it usually forgets the script. Trust doesn't come from a mayoral podium; it's earned, line by line, in open-source code. And that's a concept City Hall is still trading at a loss.

NYC Token Team Blames Early Volatility for Post-Launch Price Drop

Shapiro characterized the token’s sharp price swings as a familiar feature of early-stage crypto projects.

“Like many newly launched digital assets, the NYC Token experienced market volatility,” he said, framing the turbulence as a market-driven event rather than a coordinated withdrawal.

The response followed heightened scrutiny of onchain activity surrounding NYC Token, which suffered a steep drawdown shortly after launch.

The project itself acknowledged liquidity adjustments, saying it had to “rebalance” amid strong demand.

In a post on X, the team said its partners temporarily removed funds for time-weighted average price execution and later added additional capital back into the liquidity pool.

Statement from Todd Shapiro, spokesperson for former NYC Mayor Eric Adams: pic.twitter.com/kza4UGvApJ

Those explanations have done little to calm critics. Independent analysts flagged transactions that appeared to drain liquidity NEAR peak prices, triggering concerns among traders.

One of the earliest warnings came from RUNE Crypto, which alleged that roughly $3.4 million in liquidity was withdrawn shortly after launch and accused the project of operating like a rug pull.

Onchain visualization platform Bubblemaps also highlighted unusual patterns.

According to its analysis, a wallet connected to the token deployer removed around $2.5 million in USDC near the market top and later added back approximately $1.5 million after the token’s price had fallen more than 60%.

Bubblemaps: 60% of NYC Token Traders Lost Money After Launch

Bubblemaps further detailed the scope of trader losses. Of roughly 4,300 participants, an estimated 60% ended the token’s first hours in the red.

Most losses were under $1,000, but about 200 traders lost between $1,000 and $10,000. A smaller group suffered losses in the tens of thousands, while at least fifteen traders lost more than $100,000.

Adams’ camp has emphasized that the NYC Token was pitched as a vehicle to support nonprofit initiatives and community education, not as a speculative investment.

Still, the episode has fueled transparency concerns, particularly around governance and liquidity management.

The project’s website states that the token is deployed on solana with a total supply of one billion tokens, 70% of which are allocated to a reserve excluded from circulating supply.

While the team has cited unnamed partners in its liquidity actions, it has yet to publish a detailed breakdown, leaving questions about oversight and accountability unresolved.