Lately, there has been an increase in the number of political figures involved in cryptocurrency. Last year alone, the President of the United States and the President of Argentina separately launched their own memecoins. However, one of the major issues that has been associated with the launch of these influential tokens is rug pull.
Basically, a situation in trading (especially memecoin) where a developer abandons a project and steals the invested funds, leaving the assets purchased by investors worthless. A few hours ago, the former Mayor of New York City, Mayor Eric Adams, was publicized for launching a memecoin that went drastically down a short while after it was launched.
How the NYC Memecoin Rose Rapidly and Fell Within Hours of Launch
Mayor Adams was popularly referred to as the “Bitcoin Mayor” during his time in office. He was very outspoken about his stance on cryptocurrency, and at different times he advocated for the use of digital assets. He frequently promoted cryptocurrency adoption in New York, and he even took his first three mayoral paychecks in bitcoin through Coinbase and even publicly shared it on X.
However, the controversy about his memecoin started on Monday after Adams unveiled his ‘NYC Token’ at a high-profile press event in Times Square. According to the reports shared on the token, it was marketed as a civic-focused crypto project and a tool for combating antisemitism and anti-Americanism, while branding itself as “the digital heartbeat of New York City.”
According to the market data, NYC Token surged rapidly immediately after it went live, and the token managed to hit an estimate of about $580 million market capitalization within a short period of time. The sudden rise in its price quickly gained the attention of many retail traders and crypto enthusiasts, many of whom viewed the token as a high-profile, celebrity-backed token.
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However, a few minutes after the token peaked, on-chain data revealed large liquidity movements that alarmed traders. The token’s price plunged by nearly 80% in minutes, wiping out close to $500 million in market value.
Immediately after this happened, crypto analysts and social media commentators started raising concerns over a possible rug pull. Rune Crypto, a crypto-focused account on X, claimed that at least $3.4 million had been drained following the withdrawal of a substantial portion of the token’s liquidity. These developments increased the number of speculation about how the project was structured and who ultimately controlled its liquidity pools.
Adding to the controversy, Adams personally promoted the memecoin in a widely circulated announcement video filmed from the back of a taxi cab. “We’re about to change the game. If you can’t make it to New York, we’re going to bring New York to you,” Adams said in the video, further tying his public image to the project.
As of now, there has been no official clarification from Adams or the project’s developers on whether the liquidity withdrawals are true or the allegations circulating within the crypto community are a lie
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