Introduction
A cryptocurrency token launched with the endorsement of former New York City Mayor Eric Adams has become the latest political crypto project embroiled in scandal, following the revelation of nearly $1 million in suspicious liquidity movements. On-chain analytics firm Bubblemaps identified a wallet linked to the NYC token’s deployer executing transactions that left approximately $932,000 in USDC unaccounted for, casting a shadow over the token’s charitable mission and highlighting a recurring pattern of manipulation in politician-backed digital assets.
Key Points
- Wallet 9Ty4M linked to NYC token deployer created one-sided liquidity pools on Meteora and executed suspicious USDC movements totaling nearly $1 million in unaccounted funds
- The LIBRA token scandal involved 86% of investors losing $251 million total, with only 14% turning a profit, leading to frozen assets and fraud investigations
- Court documents identify Meteora co-founder Benjamin Chow as orchestrating at least 15 token launches using an identical manipulation blueprint involving celebrity endorsements
The NYC Token's Rapid Rise and Suspicious Fall
Announced at a Times Square press conference, the NYC token was promoted by former Mayor Eric Adams as a vehicle to fund charitable causes, specifically to combat “antisemitism and anti-Americanism” and to teach children about blockchain technology. The token, representing “the spirit of New York City,” quickly captured market attention, surging to a staggering market capitalization of nearly $600 million. However, this meteoric rise was short-lived. According to Solscan data, the token’s value subsequently crashed by over 81%, from a peak of around $0.58 to just $0.11, erasing hundreds of millions in market value and leaving its market cap at approximately $110 million.
The dramatic price collapse coincided with suspicious on-chain activity. Bubblemaps reported that a wallet associated with the token’s deployer, identified as ‘9Ty4M,’ created one-sided liquidity pools on the decentralized exchange Meteora. This wallet then executed a series of transactions that removed roughly $2.43 million in USDC stablecoin liquidity at the token’s price peak. After the token’s value had dropped by 60%, the wallet added back only about $1.5 million in USDC. This sequence left a discrepancy of approximately $932,000 in USDC that was removed from the liquidity pool and not returned, a move for which, as Bubblemaps noted, “There has been no explanation.”
A Familiar Blueprint: Echoes of LIBRA and MELANIA Scandals
The alleged manipulation of the NYC token’s liquidity follows an unsettlingly familiar pattern established by other high-profile, politician-backed cryptocurrencies. Bubblemaps explicitly drew a parallel, stating the activity was “reminiscent of the $LIBRA launch, where liquidity was also heavily manipulated.” The LIBRA token, promoted by Argentine President Javier Milei, led to fraud investigations, frozen assets, and class-action lawsuits after its collapse. A Nansen report revealed the devastating outcome for investors: only 14% turned a profit, while 86% lost a combined $251 million.
Court filings in a U.S. class-action lawsuit have since alleged a coordinated scheme behind these launches. The lawsuit names Meteora co-founder Benjamin Chow as the mastermind behind at least 15 token launches following an “identical blueprint.” This blueprint allegedly involves using high-profile political and celebrity figures as “props to legitimize” what prosecutors describe as coordinated liquidity traps. A prime example is the MELANIA token, promoted by former First Lady Melania Trump just days after former President Donald Trump’s own meme coin debut. MELANIA surged to a near-$7 billion market cap before collapsing by 99% to around $80 million. Bubblemaps analysis has linked the wallets used to launch both MELANIA and LIBRA, revealing a pattern of coordinated manipulation.
The LIBRA scandal deepened with investigations in Argentina, where a judge froze assets after discovering potential “indirect payments to public officials” linked to Kelsier Ventures CEO Hayden Davis. This connection between token promoters and public officials underscores the complex regulatory and ethical challenges posed by these endorsements.
Mounting Scrutiny and the Future of Political Crypto
The NYC token incident amplifies growing scrutiny of cryptocurrencies launched or promoted by politicians and celebrities. These projects often leverage the public trust associated with these figures to attract investment, promising social good or technological education, as the NYC token did. However, the recurring allegations of liquidity manipulation—where insiders allegedly extract value at the expense of retail investors—suggest a systemic issue. The use of one-sided liquidity pools and timed withdrawals, as alleged in the NYC, LIBRA, and MELANIA cases, creates volatile, artificial markets prone to sudden collapse.
The fallout from these scandals extends beyond financial losses for investors. They erode trust in the broader cryptocurrency ecosystem and present significant regulatory challenges. When a project is linked to a public figure, it blurs the lines between endorsement, promotion, and potential culpability. As of the report, Decrypt had reached out to Eric Adams for comment on the allegations surrounding the NYC token. The continued pattern, however, suggests that without greater transparency, accountability, and regulatory clarity, the cycle of politician-backed token launches followed by allegations of fraud and manipulation is likely to persist, leaving a trail of financial wreckage and legal battles in its wake.
📎 Related coverage from: decrypt.co
