Argentine President Javier Milei recently endorsed a cryptocurrency token to support local businesses, but the move quickly backfired. Milei promoted the LIBRA token in a post on X late Friday, claiming the funds raised would help small and medium-sized enterprises in Argentina, Bloomberg reported.
He emphasized that the project was privately managed and assured that he had no financial interest. However, widespread concerns about a potential scam soon emerged, leading Milei to delete the post just hours later.
Questions Over Legitimacy
The LIBRA token’s name appeared to be a nod to Milei’s political party, La Libertad Avanza, or his libertarian economic philosophy. According to the president, he had met with KIP Protocol, the company behind the token, months ago.
The company’s website features an October 20 blog post with a photo of Milei posing alongside its co-founder.
Despite these connections, Milei’s endorsement triggered immediate panic. Many Argentines speculated whether his account had been hacked or if he had been misled by crypto scammers. Given the rising number of fraudulent crypto projects, scepticism spread rapidly.
Warnings From Social Media
Concerns escalated when X’s Community Notes flagged the post, warning users to be cautious about the token. Crypto scams, particularly “rug pulls,” have become a significant problem on social media, where fraudulent projects often lure investors before abruptly shutting down.
Milei removed the endorsement five hours after it was posted. Later on, he explained that he had not received all the information regarding the token, saying, “After becoming aware of the details of the project, I decided not to continue spreading the word.”
Economic Challenges Persist
While Milei has gained favour among investors for his aggressive economic policies, Argentina’s financial struggles remain unresolved. Inflation has declined, but foreign investment has been slow to materialize.
The government has yet to remove the complex currency controls that have long deterred international investors. Despite these hurdles, Argentina’s economy is expected to return to growth in 2025 after enduring two years of recession.
Meanwhile, Argentina faces additional economic headwinds. New tariffs from former U.S. President Donald Trump could hurt Argentine exports. The auto industry is also taking a hit, with Nissan cutting production and Mercedes-Benz exiting the country after more than 70 years.
Lessons From Other Crypto Failures
Milei’s misstep comes at a time when scepticism around cryptocurrencies is growing. Recently, the Central African Republic (CAR) launched a memecoin that saw a massive 88.7% price drop in just 24 hours, fueling doubts over its legitimacy. The incident highlights the volatility and risks associated with unregulated digital assets.
Milei’s brief involvement with LIBRA serves as a reminder of the risks tied to political figures endorsing financial products without thorough vetting. While cryptocurrency holds promise for economic innovation, it remains a space rife with uncertainty and potential fraud.
Also Read: From $0 To $527M Valuation, Central African Republic’s Memecoin $CAR Faces Scrutiny