Argentina’s President Milei Accused of Fraud After LIBRA Token Crashes 95%

Argentina’s President, Javier Milei, is under scrutiny after being accused of fraud for allegedly promoting LIBRA, a Solana-based token that collapsed, wiping out millions in investor funds. As legal actions are taken to protect investors, the fallout from the scandal continues to grow. Federal Judge María Servini has been assigned to investigate, following several legal complaints.

Milei’s involvement is tied to insider trading, with many speculating that his social media post was part of a strategy to divert attention from the consequences.

What Sparked the Chaos?

The trouble began when Milei shared an X (formerly Twitter) post endorsing LIBRA as a tool to support small businesses. While Milei later claimed it was a routine post to help entrepreneurs, the damage was already done. The six-hour endorsement caused LIBRA’s market cap to surge past $4 billion. However, shortly after, insiders withdrew $87 million in liquidity, causing the token’s value to crash by 95%. Investors accused Milei of misleading them, which led to fraud charges.

Blockchain analysis firm Bubblemaps revealed that LIBRA’s creators had been involved in other failed crypto projects, including MELANIA, which collapsed earlier in the year. This raised further suspicions about the people behind LIBRA.

Hayden Mark Davis, a representative of KIP Protocol, who admitted profiting from the LIBRA collapse, accused President Milei of contributing to the crash. In a video, Davis claimed that Milei and his team abruptly withdrew their support for LIBRA and erased previous endorsements from social media, despite earlier promises.

Legal Investigations and Economic Impact

Judge Servini’s investigation, which has no set deadline, is running alongside a separate probe by Argentina’s Anti-Corruption Office. Lawyer Jonatan Baldiviezo, who filed one of the complaints, argues that Milei played a significant role in what he calls a fraudulent scheme. The scandal has also hurt Argentina’s economy, with the stock market taking a hit.

The S&P Merval dropped over 5%, marking its worst intraday fall since July 2023. Economy Minister Luis Caputo attempted to downplay the incident, calling crypto a space full of “gamblers” that is hard for most people to understand.

Milei Responds

In an interview on Todo Noticias, President Milei denied any wrongdoing, insisting that he has nothing to hide and is willing to face the investigations. He defended his actions, claiming that as a technology enthusiast, he simply shared information about a tool to help finance small businesses.

As the legal probes continue, investors and regulators alike are watching closely. The case, now dubbed ‘Cryptogate’, could have long-term implications for crypto regulations in Argentina.