A cryptocurrency promoted this week by former New York City mayor Eric Adams spiked in value before rapidly losing most of its gains, and is connected to a landlord who previously secured a lucrative city-backed homeless shelter deal after hiring a lawyer with close ties to Adams.
Adams told journalists Monday morning that the “NYC Token” project would generate money to fund blockchain education for underserved New Yorkers and fight antisemitism and “anti-Americanism.”
He didn’t say how, or specify who he was working with, but said he wasn’t drawing a salary yet.
The project’s website mentions an entity called C18 Digital LLC in its terms of service. An entity with that name was formed in Delaware on December 30. The certificate of formation was signed by Sefi Zvieli.
The City, a nonprofit news outlet, reported in 2023 that Zvieli avoided foreclosure on a “filthy, fetid, and dangerous” block of student housing he owned in Brooklyn by inking a deal to rent it to a New York City-financed nonprofit as a homeless shelter for $3.5 million a year.
The story said he snagged the deal after hiring Frank Carone, a lawyer with close ties to Adams, after Adams had won the New York City mayoral election but before he was sworn in as mayor. Zvieli has also been listed in public records for various New York companies and has been described by Israeli news outlets as a hotel investor.
It’s unclear what role Zvieli played in NYC Token beyond signing the formation papers. He didn’t reply to an email address listed for him in website registration records. Carone didn’t respond to requests for comment.
The token’s trading history showed what happened in the hours after Adams plugged it: After peaking around 50 cents per token, its price fell to less than 9 cents per token. It has since risen to around 13 cents per token.
Social media users who said they had purchased the coin expressed outrage, accusing Adams or people affiliated with the project of stealing funds. The crypto analytics company Bubblemaps said in posts on X that a wallet withdrew $2.5 million of sales proceeds from a liquidity pool associated with NYC Token shortly before its value collapsed, before putting about $1.5 million back.
Elissa Buchter, a spokesperson for NYC Token, said in an email that the token’s backers were not responsible for its wild performance.
“Our market maker made adjustments in an attempt to keep trading running smoothly, and as part of this process, moved liquidity,” she said in an email. “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.”
A spokesman for Adams shared a statement in which Adams denied profiting from the token’s launch, said he didn’t personally invest in the token, and said “no money was taken out of NYC Token.”
“The NYC Token was designed as a free, voluntary way to support educational and nonprofit efforts,” said the spokesman, Todd Shapiro. “Claims suggesting otherwise are inaccurate.”
As mayor, Adams was friendly with some figures in the cryptocurrency industry and converted some of his paychecks to bitcoin. In interviews on Monday, he twice referred to blockchains, the technology that acts as a ledger for many digital asset transactions, as “blockchange.”
Despite the controversy surrounding the NYC Token, it’s so far faring better than “NYCCoin,” a token that Adams boosted early in his mayoralty. Trading on that dried up, and it was reportedly disavowed by the city and delisted by its main exchange in 2023.
