Argentine President Javier Milei is facing fraud accusations over his alleged promotion of the failed LIBRA memecoin, a controversy that has sparked political and legal consequences. Despite Milei’s denial of any wrongdoing, the scandal, dubbed “Libragate,” has drawn scrutiny from investors, regulators, and political opponents alike.
Milei’s Involvement: Promotion or Mere Endorsement?
During a February 17 interview with Todo Noticias, Milei insisted that he did not promote the LIBRA token but merely “spread the word” about it. His statement followed allegations that his endorsement led to a massive rally in the token’s price before its dramatic collapse.
LIBRA, a Solana-based token associated with the Libertad project, surged to a $4.56 billion market cap on February 14 after Milei’s post about it on X (formerly Twitter).
It all began with this post at 5:01 PM ET from Javier Milei.
— The Kobeissi Letter (@KobeissiLetter) February 15, 2025
As seen during President Trump's memecoin launch, the first hour was full of speculation:
Was this a hack or a real launch?
It turned out to be real as multiple other Argentinian politicians posted the news. pic.twitter.com/cL0ZQgxtCB
However, shortly after deleting the post, LIBRA lost 94% of its value, prompting accusations of a pump-and-dump scheme. Investors who bought into the hype claim they suffered significant losses due to Milei’s influence.
The collapse of LIBRA has led to multiple fraud lawsuits against Milei, with a federal judge in Buenos Aires, María Servini, being assigned to investigate the case. Argentine lawyers, including political figures like former central bank head Claudio Lozano, filed complaints accusing Milei of involvement in a fraudulent scheme.
Blockchain analysis platform Bubblemaps has since uncovered evidence linking LIBRA’s creators to previous failed crypto projects, such as January’s MELANIA token. Meanwhile, the presidential office maintains that Milei had no involvement in the token’s creation and that he merely shared information about KIP Protocol’s blockchain initiative.
KIP Protocol, a Web3 company that builds AI payment infrastructure, has also denied any role in LIBRA’s development or market manipulation. The firm clarified that while its CEO, Julian Peh, met with Milei in October 2024, the discussion did not include any plans for launching LIBRA.
Despite the controversy, experts believe the LIBRA scandal is unlikely to affect Argentina’s growing crypto adoption. María Fernanda Juppet, CEO of CryptoMKT, emphasized that most transactions in Argentina involve dollar-backed stablecoins rather than speculative tokens like LIBRA. She sees the Milei controversy as more of a political issue than a reflection of broader sentiment toward cryptocurrency.
Beyond the crypto market, the LIBRA fiasco has had tangible economic repercussions. Argentina’s stock market reacted negatively, with the S&P Merval index dropping over 5% after news of the fraud allegations broke. Although the market rebounded slightly, the incident highlighted the risks of high-profile political figures engaging with volatile assets.
Economy Minister Luis Caputo downplayed the situation, characterizing the crypto market as an “infinitesimal world” dominated by “gamblers.” However, the broader impact on investor confidence in Argentina remains to be seen.
HODL Team
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