On Monday, former Mayor Eric Adams promoted a new cryptocurrency coin called NYC Token — appearing on Fox Business, holding a news conference in Times Square and releasing a promotional video in which he tells a taxi driver: “This thing is about to take off like crazy.”

“Take off like crazy” it did. Shortly after its launch late Monday, the value of the NYC Token spiked, reaching a market cap of about $600 million.

Blockchain data show that someone associated with the project then removed about $2.5 million in liquidity. The value of the coin then plunged.

What You Need To Know

Former Mayor Eric Adams’ new cryptocurrency venture, launched Monday, has sparked accusations of fraud

After the value of the NYC Token coin spiked, someone linked to the project removed $2.5 million in liquidity, causing the value to plunge

In a statement, Adams said the team had not withdrawn any money from the account

“In crypto, they call this a rug pull,” Eleanor Terrett, founder and host of the “Crypto in America” podcast, said. “So when creators tied to a certain token or a certain project, they take money and they run, basically. And the investors, or the so-called retail investors, someone like me or you — everyday traders, everyday investors — they’re left holding the bag.”

The crypto community immediately branded NYC Token a scam. But Adams insists otherwise. 

“After the launch of NYC Token, there was a lot of demand. 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 is subject to lockups and transfer restrictions. THE TEAM HAS NOT WITHDRAWN ANY MONEY FROM THE ACCOUNT,” he wrote in a statement.

But skeptics questioned the timing.

“This happened at the price peak, which is the red flag here,” Terrett said.

The same wallet that removed the $2.5 million later returned about 1.5 million. But that left close to $1 million unaccounted for.

“By taking that two-and-a-half million dollars out, that is essentially money that you can take and put into any centralized exchange and cash it into your bank account,” said Jennifer Sanasie, an executive producer and anchor at the cryptocurrency news outlet Coindesk. “So that is two-and-a-half million that someone took out.”

Sanasie notes that the Securities and Exchange Commission does not regulate this type of cryptocurrency, known as a memecoin. But investors who believe they’ve been defrauded could file suit, and the NYC Token is now under heavy scrutiny.

Adams has not disclosed the identity of his partners, and the barebones NYC Token website provides little information.

“A lot of folks in this industry are looking at this project and have a lot of questions, and not a lot of answers,” Sanasie said.