Argentina’s President Javier Milei is under investigation after promoting the little-known cryptocurrency LIBRA. His endorsement caused a brief surge in the token’s value before it crashed, leading to accusations of fraud. Critics claim this was a pump-and-dump scheme , and some are calling for his impeachment. The government has formed a task force to determine if Milei or others committed illegal acts. On February 14, Milei promoted LIBRA on X, suggesting it could boost Argentina’s economy and support small businesses. This caused the token’s market cap to jump beyond $4 billion , with insiders cashing out over $100 million in profits. However, the surge was short-lived. LIBRA lacked a structured financial model, its website was set up only hours before launch, and over $87 million was withdrawn within the first three hours. The token’s value collapsed soon after, showing clear signs of a pump-and-dump. According to The Kobeissi Letter, large holders quickly liquidated their assets, some making $4 million or more as the market cap peaked at $4.6 billion. At 5:40 PM ET, when the price hit its highest point, LIBRA’s value plummeted. In response to public backlash, Milei deleted his promotional post and claimed he had not fully understood the project. Later, he explained that after learning more, he decided to stop promoting it. Argentina’s presidential office tried to downplay the issue, calling it a standard blockchain-related promotion. However, officials admitted that Milei had met with Hayden Mark Davis, a figure connected to LIBRA’s infrastructure through KIP Protocol. The government has now launched an official probe to examine whether any officials, including Milei, acted improperly. Investigators will also scrutinize KIP Protocol for possible legal violations. To contain the damage, Milei ordered the creation of a special Investigation Task Unit (UTI), consisting of financial, crypto, and anti-money laundering specialists. This unit will analyze LIBRA’s launch and those involved. The government stated that all findings will be turned over to the courts to determine if any crimes were committed. Beyond cryptocurrency, the controversy has triggered a political crisis. Critics argue that Milei’s reckless endorsement of a speculative asset led to financial losses for investors. Argentine lawmaker Gabriela Estevez accused him of engaging in a classic pump-and-dump scheme, where token creators buy at a low price, hype it up, and sell at a peak, leaving others with losses. The scandal has even led to impeachment threats. A political faction has officially started proceedings, calling the incident unprecedented in Argentina’s history. Buenos Aires Governor Axel Kicillof called it a large-scale financial fraud, warning that both local and international investors had been misled. He compared the situation to a cryptocurrency pyramid scheme. This case highlights the dangers of political figures endorsing meme coins, a trend that has grown since former U.S. President Donald Trump launched his own token. Ethereum co-founder Vitalik Buterin had already warned that such political meme coins could damage the crypto market’s credibility. Since Trump’s involvement, scammers have launched fake tokens based on political figures, with LIBRA being the latest example of these risks.
