Inside the botched launch of ex-NYC Mayor Eric Adams' new crypto token

NEW YORK (AP) — For a moment, Eric Adams was riding high.

Fresh off trips to Dubai and the Democratic Republican of Congo, the now jobless ex-mayor of New York City was back in Times Square on Monday to announce his first initiative as a private citizen: a new cryptocurrency coin that would also serve to beat back antisemitism and “anti-Americanism.”

“We’re about to change the game,” he promised, without describing how, exactly, the digital asset would support those lofty ambitions. “This thing is going to take off like crazy.”

But after surging to a nearly $600 million valuation within minutes of its launch, the new coin, dubbed NYC Token, went into free fall, losing nearly 75% of its value by that evening. The drop came after an account linked to the token's creation withdrew $2.5 million worth of coins, according to the crypto-analytics firm Bubblemaps.

Around $1.5 million was later returned, the firm said, though by then investor confidence had collapsed. To some cryptocurrency experts, the rollout had all the hallmarks of a “rug pull.” The scheme — prevalent among celebrity-linked meme coins — involves insiders hyping an asset then quickly dumping their stakes, saddling amateur investors with deep losses.

Others have suggested that Adams and his inexperienced team were themselves duped by savvier investors, who took advantage of a sloppy launch.

The debate has found Adams back in a mode of damage control that defined so much of his one-term mayoralty: denying misconduct, attacking the press and facing scrutiny about the competence of his inner circle of loyalists.

Through a former campaign spokesperson, Adams has released multiple statements in recent days clarifying that he had not profited off the token and had not moved investor funds, calling reports otherwise “false and unsupported by evidence.”

“Like many newly launched digital assets, the NYC Token experienced market volatility,” the spokesperson, Todd Shapiro, said Wednesday. “Mr. Adams has consistently emphasized transparency, accountability, and responsible innovation.”

A machine lawyer and an Israeli hotelier

Despite claims of transparency, Adams has so far declined to reveal his partners in the token.

But two people close to the project confirmed that Frank Carone, Adams' former chief adviser and one-time lawyer for the Brooklyn Democratic Party, was closely involved in the launch. The two people spoke to The Associated Press on condition of anonymity because they had been asked not to disclose the identities of people involved in the token's creation.