Argentine President Javier Milei is confronting serious fraud allegations following his promotion of the cryptocurrency $LIBRA, which has led to significant financial losses for investors and ignited a political firestorm.
Promotion and Collapse of $LIBRA
On February 14, 2025, President Milei endorsed $LIBRA, a meme-based cryptocurrency, through his official social media channels. This endorsement caused the token’s value to skyrocket from a fraction of a cent to $5.20 within minutes. However, the surge was short-lived; within hours, the token’s value plummeted, resulting in substantial losses for approximately 74,000 investors. Reports indicate that eight wallets associated with the token’s creators withdrew nearly $99 million during this period, raising suspicions of a “rug pull” scam.
Legal and Political Repercussions
The fallout from the $LIBRA collapse has been swift and severe. Multiple criminal complaints have been filed against President Milei, accusing him of fraud, illicit association, and dereliction of duty. The Observatorio del Derecho a la Ciudad, a local NGO, stated, “We denounce Milei as being part of an illicit association that organized a scam with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with a loss of more than $4 billion.”
Opposition parties are capitalizing on the scandal, with some lawmakers calling for impeachment proceedings. However, the political landscape suggests that garnering sufficient support for such measures may prove challenging.
President Milei’s Response
In the wake of the controversy, President Milei retracted his endorsement of $LIBRA and deleted related social media posts. He has defended his actions, claiming he was not fully informed about the project’s specifics and acted in good faith. Milei stated, “I only gave my opinion,” emphasizing that he had no direct involvement in the cryptocurrency’s development.
Broader Implications
The $LIBRA debacle has cast a shadow over Argentina’s burgeoning cryptocurrency market, raising questions about the need for stricter regulations and oversight. The incident has also tarnished the reputation of the Solana blockchain network, which hosted $LIBRA, leading to a 15% decline in its token’s value.
As investigations continue, the situation serves as a cautionary tale about the volatile intersection of politics and digital assets. It underscores the necessity for comprehensive due diligence and regulatory frameworks to protect investors from similar schemes in the future.
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