Eric Adams, the former "Bitcoin Mayor" of New York City who once took his mayoral paychecks in cryptocurrency, has found himself at the center of a crypto controversy that encapsulates everything wrong with celebrity-backed digital tokens.

On Monday, Adams unveiled NYC Token at a Times Square press conference, announcing that proceeds would fund programs against antisemitism, blockchain education for youth, and scholarships for underserved communities. Within hours, the Solana-based token had surged to a $700 million market capitalization—then crashed more than 80%, leaving early buyers nursing catastrophic losses.

The Rise and Fall of NYC Token

The token's trajectory was breathtakingly brief. Launched on the Solana blockchain, NYC Token attracted immediate speculation from crypto traders hoping to profit from Adams's celebrity and his stated pro-crypto credentials. The market cap briefly touched $700 million as momentum traders piled in.

Then came the crash. On-chain data analyzed by blockchain research firms revealed that wallets linked to the token's deployer removed approximately $2.5 million in liquidity shortly after the peak. This pattern—creating a token, letting the price rise on outside buying, then extracting value by draining liquidity—is the classic signature of a "rug pull."

"This is such an obvious rug."

— Nicolas Vaiman, crypto analyst at Bubblemaps

The Rug Pull Allegations

The accusations against NYC Token mirror those that have plagued countless celebrity crypto projects. Analysis shows that a wallet linked to the token's deployer removed approximately $2.43 million in USDC liquidity, with about $1.5 million later returned—leaving roughly $932,000 unaccounted for. Some estimates put the total extraction even higher, at around $3.4 million.

After reports of the alleged rug pull went viral on social media, an account associated with NYC Token claimed that "the team has not withdrawn any money from the account" and announced it had added new funds to the liquidity pool. The denial did little to calm investors who had watched their holdings evaporate.

Adams's Crypto History

The controversy marks a sharp reversal for a politician once celebrated as a crypto champion. When Adams took office in January 2022, he made headlines by accepting his first three paychecks in Bitcoin and Ethereum, declaring his intention to make New York City "the center of the cryptocurrency industry."

Adams positioned himself as part of a new generation of "crypto mayors" competing with Miami's Francis Suarez to attract blockchain businesses. His pro-crypto stance was notable given New York's historically restrictive regulatory environment under the BitLicense framework.

Now, instead of being remembered as the mayor who brought crypto to New York, Adams may become a cautionary tale about the risks of celebrity involvement in digital assets.

The Broader Celebrity Crypto Problem

NYC Token joins a long list of celebrity-backed cryptocurrencies that have ended badly for investors:

  • Argentina President Milei's LIBRA Token: Crashed similarly after launch, with allegations of insider manipulation
  • Various Celebrity NFTs: From athletes to musicians, celebrity NFT projects have overwhelmingly lost value
  • Meme Coins: While some like Dogecoin have survived, most celebrity-endorsed meme coins have gone to zero

The pattern is consistent: celebrities lend their names to crypto projects, retail investors buy in hoping for quick profits, and values collapse—often with suspicions of insider manipulation.

What Investors Should Learn

For anyone tempted by the next celebrity crypto launch, NYC Token offers several lessons:

  • Celebrity Endorsement Is Not Due Diligence: A famous name adds nothing to a token's fundamental value or legitimacy
  • Check Token Distribution: If a small number of wallets control most of the supply, rug pull risk is elevated
  • Verify Liquidity: Thin liquidity makes tokens susceptible to dramatic price swings in both directions
  • Question the Use Case: If the stated purpose could be accomplished without a token, the token may be unnecessary

Regulatory Implications

The NYC Token saga comes as regulators grapple with how to police the crypto space. The Securities and Exchange Commission has brought enforcement actions against numerous token projects, arguing they represent unregistered securities offerings.

Whether NYC Token rises to the level of SEC enforcement is unclear, but the episode provides fresh ammunition for lawmakers seeking stricter crypto regulations. For an industry trying to rebuild credibility after the FTX collapse and other scandals, celebrity rug pulls are a persistent image problem.

Adams's Response

Adams has not directly addressed the rug pull allegations beyond the NYC Token account's denial. The former mayor, who left office after a single term amid various controversies, now faces questions about his judgment in lending his name to a venture that has caused financial harm to retail investors.

For those investors, the experience reinforces a lesson that the crypto industry seems determined to teach over and over again: in the Wild West of digital assets, celebrity sparkle often conceals very ordinary scams.