The launch of the “NYC Token” cryptocurrency this week has been marred by controversy, with its value soaring and then plummeting rapidly, raising questions about its legitimacy and connections to New York City officials. The token, promoted by former New York City Mayor Eric Adams, promised to fund blockchain education and combat antisemitism, but its volatile trading history and links to a controversial property developer have sparked outrage and accusations of a potential “pump and dump” scheme. This article delves into the details of the NYC Token saga, exploring the key players and the events that unfolded.
NYC Token: A Rocky Start and Rapid Decline
The NYC Token experienced a dramatic rise and fall within hours of being publicly endorsed by Eric Adams. Initially, the token’s price peaked around 50 cents, fueled by the publicity surrounding the former mayor’s involvement. However, this surge was short-lived. Almost immediately, the price began to decline sharply, eventually falling to less than 9 cents. While it has since recovered slightly to around 13 cents, the initial collapse left many investors reeling and questioning the project’s viability.
This volatility has drawn comparisons to other speculative cryptocurrency ventures, and has led to accusations of manipulation. Social media platforms were flooded with complaints from users who claimed to have lost money after purchasing the token based on Adams’ promotion.
The Connection to Sefi Zvieli and a Lucrative City Contract
The controversy surrounding the NYC Token extends beyond its price fluctuations. Investigations have revealed a connection between the project and Sefi Zvieli, a property developer with a history of securing lucrative contracts with the city. Zvieli is listed as the individual who signed the formation papers for C18 Digital LLC, the entity behind the NYC Token.
In 2023, The City, a non-profit news organization, reported that Zvieli had avoided foreclosure on a dilapidated student housing complex in Brooklyn by securing a $3.5 million annual contract with the city to use the property as a homeless shelter. Crucially, Zvieli hired Frank Carone, a lawyer with close ties to Eric Adams, shortly before Adams was sworn in as mayor, to assist with the deal. This timing has raised concerns about potential influence peddling.
Examining the Role of Frank Carone
The involvement of Frank Carone, a prominent figure in Adams’ inner circle, adds another layer of complexity to the situation. Carone served as Adams’ chief of staff during the transition period and maintained a close relationship with the mayor after he took office. His representation of Zvieli in the homeless shelter deal, coupled with the connection to the NYC Token, has prompted calls for greater transparency and scrutiny. Both Zvieli and Carone have remained silent in response to requests for comment.
Claims of Market Manipulation and Denials from Project Backers
Following the price crash, concerns were raised about potential market manipulation. Crypto analytics firm Bubblemaps reported that a wallet associated with the NYC Token withdrew $2.5 million in sales proceeds from a liquidity pool shortly before the price plummeted, and then returned approximately $1.5 million. This activity fueled speculation that insiders were profiting from the token’s volatility at the expense of ordinary investors.
Elissa Buchter, a spokesperson for the NYC Token, attempted to downplay these concerns, stating that the token’s “market maker” made adjustments to maintain trading stability and that the team had not sold any tokens or withdrawn funds. However, these explanations have done little to quell the growing skepticism.
Adams Denies Personal Profit and Defends the Project
Facing mounting criticism, Eric Adams issued a statement through his spokesperson, Todd Shapiro, denying any personal financial gain from the NYC Token launch. He also stated that he did not personally invest in the token and that “no money was taken out of NYC Token.”
Adams reiterated the project’s stated goals of supporting blockchain education and combating antisemitism, framing it as a “free, voluntary way” to contribute to these causes. He also highlighted his previous support for the cryptocurrency industry, including converting portions of his mayoral salary into Bitcoin. However, the controversy continues to linger, casting a shadow over his involvement. The term digital currency is also being used to describe the token.
A Pattern of Failed Crypto Ventures?
This isn’t the first time a cryptocurrency project associated with Adams has faced difficulties. Earlier in his mayoralty, he promoted “NYCCoin,” another token that ultimately failed to gain traction. Trading on NYCCoin dried up, and the city reportedly disavowed the project, leading to its delisting from major exchanges. This history raises questions about Adams’ judgment in endorsing such ventures and whether he fully understands the risks involved. The failure of NYCCoin serves as a cautionary tale for the NYC Token.
Conclusion: A Need for Transparency and Caution
The NYC Token saga is a stark reminder of the risks associated with the volatile world of digital currency and the importance of due diligence before investing. The connections to a controversial property developer and a lawyer with close ties to the former mayor have understandably raised concerns about potential conflicts of interest and market manipulation.
While Adams has denied any wrongdoing, the lack of transparency surrounding the project and the rapid price fluctuations have eroded public trust. Moving forward, greater scrutiny and regulation are needed to protect investors and ensure that cryptocurrency ventures are conducted ethically and responsibly. The situation underscores the need for caution and critical evaluation when considering investments in emerging technologies, especially those promoted by public figures.