For a moment, Eric Adams was riding high.

Fresh off trips to Dubai and the Democratic Republic 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.

One of Carone’s former clients, Yosef Sefi Zvieli, a real estate investor linked to several Israeli hotels, was also part of its creation, Shapiro confirmed to The Associated Press.

Zvieli, whose involvement was first reported by Business Insider, previously owned a college dorm in Brooklyn, which drew complaints from students of filthy conditions and neglect. After defaulting on his mortgage, Zvieli hired Carone as his attorney and was able to turn the troubled property into a city-financed homeless shelter.

Their exact role in the token launch was not immediately clear, though at least part of Zvieli’s job involved reaching out to influencers ahead of the debut. Neither he nor Carone appeared to have direct experience in cryptocurrency. Messages left with the two men were not returned.

As questions around the launch swirled this week, Adams sought guidance from Brock Pierce, the billionaire crypto investor, and former “Mighty Ducks” child actor, whose private jet he sometimes used as mayor.

After looking into the project, Pierce said he was confident that “no one has run off with anyone’s money.”

Though he described himself as Adams’ “crypto adviser,” Pierce said he was only made aware of the project after its launch. “Had I been consulted, I would’ve put together a team of more qualified people who knew what they’re doing,” he added.

Political-coin instability

Even within the largely unregulated world of meme coins, experts say projects promoted by politicians are especially prone to unsavory trading practices.

The president of Argentina, Javier Milei, has faced fraud allegations for his own crypto promotion, which drew thousands of investors before swiftly collapsing. Coins launched by President Donald Trump and his wife, Melania Trump, also saw significant price fluctuations upon release.

The number of accounts that invested in NYC Token were far less than those ventures, totaling just over 4,000 as of Thursday, according to Nicolas Vaiman, the founder of Bubblemaps, which conducted an analysis of publicly available trade records.

Roughly 80% of those accounts had bought in during a 20-minute period before Adams had announced the coin but after it was made available for purchase, the analysis found. The window, Vaiman said, provided an advantage to insiders involved in the launch and other traders who pay close attention to new tokens.

“Political coins are driven purely by attention, and the crypto community is aware that attention peaks right after the launch,” Vaiman said. “People know you don’t want to stick around, especially for such a vague prospect, like fighting anti-Americanism or antisemitism. What does it even mean? How are you going to achieve that in a token?”

The website for the coin says a “portion of the proceeds” will be divided evenly among three causes: antisemitism and anti-Americanism “awareness campaigns,” crypto education for the city’s youth and a scholarship initiative.

It does not detail which organizations will be supported, or what percentage of the proceeds will go toward charitable causes.

Uncertain fate

Adams has disputed that any money had been pulled by the token’s creators.

He has said the appearance of withdrawals were the result of adjustments made by the designated market maker, an entity that buys and sells orders of a new token to ensure traders can make purchases without major price shifts.

The market makers include FalconX, a well known digital asset broker. The company declined to respond to inquiries on the record.

As of Wednesday, a majority of accounts that invested in the coin had lost money, according to the Bubblemaps analysis. Fifteen traders were down at least $100,000, while 10 had netted $100,000.

Pierce said he was still hoping the project could be salvaged, adding that “the fate and outcome of this project will be determined in the coming days.”

But some in the crypto world had their doubts.

“It could be a legitimate project with just a really bad rollout,” said Benjamin Cowen, the founder of another crypto research analytics firm, Into the Cryptoverse. “But the way it was launched didn’t instill a lot of confidence. It’s hard to regain trust in the crypto community.”

There has been a major development in the FACTOR Canada cybertheft case.

The Ontario Superior Court of Justice has issued an arrest warrant for Quebec man James Campagna, found in contempt of court after nearly $10 million in music grant funds went missing.

In July 2024, it was reported that $9.8 million was allegedly stolen from the Canadian music non-profit and granting body’s Scotiabank account. In court last Friday (Jan. 9), where Billboard Canada was present, Justice W.D. Black of the Ontario Superior Court of Justice ruled that he will endorse a warrant for business owner James Campagna, sentencing him to 30 days in jail.

“I find that Mr. Campagna is a liar, a fraud, and a scofflaw, deliberately and knowingly breaching this court’s orders,” wrote Justice Black in a bombshell Commercial List endorsement dated Jan. 9.

According to court documents, Campagna is the sole shareholder of Vipera, a Quebec-based tech company. The document claims that money was transferred in the form of a counterfeit invoice from FACTOR to Vipera’s Scotiabank account by Campagna, who moved the money into an account owned by cryptocurrency platform VirgoCX Direct.

The funds were transferred out mere days after the Department of Canadian Heritage deposited $14.3-million to distribute to the music industry.

After the case became public, FACTOR released a public statement, claiming that Campagna gained access to the bank account from an IP address that had never previously accessed their banking info. Additionally, the organization noted that it was never flagged about the “highly unusual, suspicious, and illegal activity” by Scotiabank.

The case is one of — if not the biggest — theft cases in the history of the Canadian music industry. Nearly two years into the legal battle, FACTOR’s lawyers have consistently requested that Campagna be held in contempt of court — now it’s finally happening, a rarity in the Commercial List court.

In Friday’s filing, Justice Black writes that “Mr. Campagna has knowingly and intentionally disregarded and/or failed to comply with various orders of this court” including producing documents, correspondence, corporate financial statements and banking information.” Justice Black writes that Campagna has made various excuses to avoid participating, in what he calls “a frustrating ‘the dog ate my homework’ approach to his obligations.”

“Mr. Campagna has lied about various aspects of his conduct and activities in relation to the fraudulent transfer,” he writes. “It is highly likely that he was a knowing and active participant in the fraud, and that he has benefitted and continues to benefit from the proceeds of that fraud.”

According to “FACTOR’s investigations and surveillance,” Campagna has now “fled jurisdiction,” Justice Black reports, and moved to Qatar. That’s according to evidence including social media posts indicating he plans to “stay and work in Qatar for a year” and documents that show his four children have been enrolled in school in the country.

In his endorsement, Justice Black recognizes that Campagna “has taken active steps with a view to putting himself beyond the reach of the court.” Still, “there should therefore be plenty of time, once my order comes to his attention, within which Mr. Campagna can take steps to purge his contempt.”

In a statement to Billboard Canada, FACTOR Canada CEO Meg Symsyk says the ruling is an important development as the organization pursues the repayment of the missing money.

“FACTOR welcomed Justice Black’s ruling this past Friday, which reaffirms what we maintained since the outset: the perpetrators of this theft have not been held to account,’ she says. “The finding of contempt against Mr. James Campagna clearly illustrates the challenges that FACTOR has encountered in working to recover the stolen funds. FACTOR will continue to pursue all available legal avenues to recover these public monies and clear the organization and its staff.”

Scotiabank tells Billboard Canada that they cannot comment, given that the matter is before the courts.

As the legal proceedings continue, the question of penalty and remedy remains open-ended. FACTOR has made its stance clear, as they hope to recoup the almost $10 million in lost funds. In addition to seeking contempt from Campagna, the non-profit is putting legal pressure on Scotiabank, which they said in 2024 has “participated reluctantly, and in the most limited fashion” during the initial investigations.

FACTOR has said that Scotiabank “has acknowledged it has never reported this financial crime to law enforcement” and that despite an issued money transfer of $9,772,875.33, over 300 times larger than any previously made from the account, there were “no alerts to FACTOR of this highly unusual, suspicious, and illegal activity.”

FACTOR is one of the country’s most significant investors in the development, financing and support of Canadian music. Many in the music industry have been watching this case carefully.