Argentine President Javier Milei is facing serious allegations after the collapse of the Libra cryptocurrency, which saw its market value briefly surpass $4 billion before crashing within hours.
The situation has triggered an internal government investigation, legal complaints, and widespread criticism from the crypto community.
Argentine President Javier Milei’s Involvement In LIBRA Crypto
Late Friday night, Milei, known for his active social media presence, directed followers to a website promoting Libra as a way to raise funds for struggling businesses in Argentina.
Shortly after, the token launched on the Solana blockchain saw an unprecedented surge in value. Investors, including Barstool Sports founder Dave Portnoy, poured money into the token, only to suffer massive losses when its value plummeted.
Crypto entrepreneur Hayden Davis, CEO of Kelsier Ventures, was involved in launching the token. After the crash, Davis admitted to making profits but later promised to return the money in an attempt to restore investor confidence.
However, the damage was done. Portnoy called it “the biggest rug pull of all time,” using crypto slang for a scam where developers abandon a project after making huge gains.
Now, Milei’s administration is in crisis mode. The Argentine leader, who came into power in late 2023 on promises of economic reform, is facing fraud charges in an Argentine criminal court.
The complaint, filed by lawyers and political opponents, including former Argentine Central Bank head Claudio Lozano, accuses Milei and the team behind Libra of committing multiple frauds.
The David-Milei’s Connection
Meanwhile, Milei’s office has distanced itself from Davis, stating that he has no formal ties to the Argentine government. However, Davis previously claimed in a social media video that he was an adviser to Milei and was working on major tokenization projects in Argentina.
Milei acknowledged that he met Davis at the presidential palace last month. He said that he initially saw Libra as a private initiative with good intentions but denied having direct involvement in its launch.
His statements, however, contrast with earlier endorsements of the token, leading to questions about his true level of involvement.
The controversy has also put pressure on Milei’s international agenda. He is scheduled to visit Washington this week to secure financial aid from the International Monetary Fund (IMF) and seek trade exemptions from former U.S. President Donald Trump. But the Libra debacle could undermine his credibility as he negotiates with global leaders.
Crypto industry experts have criticized the entire episode, calling it an example of unethical behaviour within the sector. Henry Elder of UTXO Management called the Libra collapse “a travesty,” saying it reflects the lack of moral responsibility among crypto leaders.
On-Chain Evidence Links $LIBRA to the Same Team Behind $MELANIA
New blockchain evidence suggests that the same team behind the failed $LIBRA cryptocurrency was also responsible for MELANIA and several other short-lived tokens.
Blockchain analysts have identified suspicious transaction patterns that strongly link these projects to a single group of insiders who made millions in profits while retail investors suffered major losses.
As investigations continue, investors are calling for more transparency in the crypto space. With blockchain forensics revealing deeper connections between fraudulent projects, regulatory scrutiny is likely to increase, potentially leading to legal consequences for those involved.