Crypto Scandal: Argentina's President Javier Milei at the Heart of a Financial Firestorm

Many Argentines, who hoped for an economic revival with Javier Milei, are starting to be disillusioned. Their president, self-proclaimed hero in the fight against inflation, finds himself at the center of a major financial scandal today. After boasting about the merits of crypto LIBRA on X, its value soared to over $4.5 billion… before collapsing by 94% when Milei deleted his post. Allegations of fraud, suspicions of “pump and dump”, judicial investigations, and threats of impeachment: the Argentine president is now in the eye of the storm.

Crypto scandal in Argentina: a presidential “rug pull”?

The affair begins with a bang on February 14. A simple post by Javier Milei on X causes the value of the LIBRA token to explode, a project presented as a way to revive the Argentine economy through blockchain. Within hours, the token reaches a market capitalization of $4.56 billion.

General euphoria… until Milei deletes his post. Panic on the markets: the Libra token collapses by 94%, and investors see their savings go up in smoke.

Behind this drop, suspicious movements are detected. According to DexScreener, the top seven LIBRA traders reportedly made an average of $4.95 million each.

From the very first hours, project insiders would have liquidated over $87 million, leaving regular investors in the dust.

“Se acabó la joda !” (“The party is over !”), indignantly states lawyer Agustín Rombolá, who filed a lawsuit for fraud and market manipulation.

In the face of this chaos, Milei attempts to play the transparency card. He asks the Anti-Corruption Office to investigate his own government, assuring that he was unaware of the project’s details.

But it is hard to believe in the president’s total innocence when it is learned that he met with representatives of KIP Protocol, linked to LIBRA, last October.

Crypto trading at the heart of chaos

Behind this affair, the entire crypto trading world is pointed out. The LIBRA already had all the signs of a doubtful project: the website was created just hours before the launch, there was a lack of clear information on the tokenomics, and above all, a large portion of the tokens was directly sellable from the start.

The numbers speak for themselves:

• $57.6 million in USDC cash-out by insiders;
• 249,671 Solana coins withdrawn (about $49.7 million);
• A market capitalization that goes from $4.5 billion to nearly nothing in 5 hours.

Hayden Mark Davis, advisor on the project, even accuses Milei of having triggered the panic.

“I don’t feel comfortable entrusting these funds to Milei’s or KIP’s team”, he asserts. A low blow that doesn’t help the situation.

Meanwhile, the crypto-influencer “Ape” reacts philosophically to the loss of his fortune:

“Can’t wait to meet Milei in person to discuss this!”.

Javier Milei weakened by complaints and opposition

As the LIBRA affair makes headlines, Milei must now face a real political storm. Several lawyers, including Marcos Zelaya and Jonatan Baldiviezo, have filed a criminal complaint against the president for fraud and violation of the public ethics law.

The opposition, for its part, does not hesitate to add fuel to the fire. Deputy Leandro Santoro is outright demanding his impeachment, arguing that “this scandal brings us international shame”.

On X, anger is rising among investors. Some denounce a huge scam, claiming to have been deceived by a setup. Others mock the express collapse of LIBRA, comparing its fall to a true financial magic trick.

For now, no judge has yet been appointed to investigate the case, but the pressure continues to mount on Milei.

Yet, Javier Milei was the embodiment of hope for a regenerated Argentina, freed from the grip of inflation. Even Elon Musk saw in him a breath of fresh air. In May 2024, the billionaire still recommended investing in Argentina, after a new meeting with the president. But after the LIBRA affair, more than a tweet will be needed to restore investors’ confidence.