Former New York City Mayor Embroiled in Rug Pull Scandal: On-Chain Investigation into NYC Token

Author: Beosin

On January 13-14, former New York City Mayor Eric Adams faced significant scrutiny due to the sharp price drop of his token, NYC, after its launch. The Beosin security team conducted a detailed on-chain analysis of this incident and shares the results below:

Event Summary

On January 13th, Beijing time, former New York City Mayor Eric Adams announced the launch of the NYC token on social media (token contract address: Ho5fkxk9uqUuVN5kt7TUFacduWCpKPAuYkM9HD3KAXA2). However, 30 minutes after the token's launch, liquidity was gradually removed from the liquidity pool created at address 9Ty4M4t9MZArhJBKFWbYrzeqdMf2Ua5eHWSRW3LXKyGt.

The address removed approximately 2,377,376 USDC, causing the NYC token price to drop by more than 80%, and its market capitalization to shrink from a peak of $600 million to less than $100 million.

On January 15, Adams continued to promote the NYC token by retweeting tweets and stated through a statement from his spokesperson, Todd Shapiro, that he had not profited from the NYC token nor withdrawn any funds from it, but the community remained skeptical.

On-chain data analysis

By analyzing the Solana address 9Ty4M4t9MZArhJBKFWbYrzeqdMf2Ua5eHWSRW3LXKyGt using BeosinTrace, we can obtain relevant results regarding its on-chain behavior.

1. Overview of On-Chain Activities

Address 9Ty4M obtained 1,000,001 USDC from the Mayan cross-chain bridge and a Kraken user address, and subsequently created an NYC-USDC liquidity pool. After the price plummeted due to the removal of liquidity at 6:43 AM Beijing time on January 13th, address 9Ty4M has been continuously buying small amounts of NYC tokens since 4:15 PM that day, and continues to do so until now.

Further tracing of the aforementioned cross-chain funds reveals that they originated from the Arbitrum address 0xBc985b167C5F3801B19E2Dec7082c2fcbBF07e91. Tracing further back, it was found that 90% of these funds were withdrawn from Kraken, and 10% came from an unknown multi-chain active transaction address 0x276fbb81c8a7567ad2412469a549bd4dc82cab65.

2. Transaction data analysis

According to data from BeosinTrace, address 9Ty4M has purchased 2,301,250 and 1,566,926 NYC tokens on Jupiter through addresses FWuiWEdkcR1NLPjozcEuErtGGDZG5kyPu3oszmnF8uni and H7Lnoh82SZghsXmoqffoCiFz7U3D1cwZ8ZPjRUMU7fc5 respectively. However, the price of NYC has only returned to 0.133-0.134, with a total market capitalization of approximately $130 million.

Currently, address 9Ty4M still holds 1,332,243.85 USDC. Due to the limited liquidity of NYC tokens, this address has made a profit of approximately $330,000 without considering NYC token gains.

Conclusion

This recent celebrity token issuance has once again sparked huge controversy. Issuing tokens inherently involves risks related to compliance, technology, and fund security. The removal of liquidity during the process, leading to a sharp drop in token prices, has further negatively impacted investors and the market.

The on-chain data analysis using BeosinTrace confirmed the existence of "liquidity manipulation." After withdrawing $2.37 million in liquidity, the issuer continued to buy back, but only returned approximately $1 million, leaving $1.33 million still held in the issuer's address. Users should be more security-conscious and avoid trading such high-risk, easily manipulated tokens. Beosin will continue to monitor token liquidity and the fund movements of related addresses to ensure the safety of users' funds.