Argentine President Javier Milei is under intense scrutiny after initially endorsing LIBRA, a relatively unknown cryptocurrency that saw a meteoric rise before experiencing a dramatic crash. The sudden price movement has sparked accusations of market manipulation, raising concerns over the ethical and legal implications of Milei’s involvement.
LIBRA was introduced as a memecoin with the purported goal of stimulating Argentina’s economy by funding small-scale projects. Its launch, announced at precisely 5:01 PM ET, immediately drew attention due to its unconventional nature. A hastily constructed website featuring a Google Form for funding applications went live, with records showing that the domain had been registered mere hours before the announcement.
Within five hours of its launch, LIBRA’s market capitalization soared to $4.6 billion, only to plummet shortly after, wiping out over $4.4 billion in value. The lack of transparency surrounding the project—such as undisclosed tokenomics and restricted domain information—led to growing suspicions of a rug pull. Reports indicate that insiders managed to cash out $87.4 million within three hours, further fueling allegations of fraudulent activity.
The aftermath of LIBRA’s collapse was swift and severe. Analysis revealed that over 82% of the token supply was concentrated in a single cluster, with insiders reportedly manipulating liquidity pools to extract stable assets while offloading massive amounts of LIBRA. As a result, the token’s value nosedived by more than 90%, with trading volume exceeding $1.1 billion, leaving retail investors bearing the brunt of the losses.
The controversy has severely damaged Milei’s reputation, casting doubt on Argentina’s stance toward cryptocurrency regulation. Calls for an investigation into potential market manipulation have intensified, with many questioning the role of political figures in such volatile financial markets.
Amid growing backlash, President Milei sought to clarify his stance, stating that he had withdrawn support for LIBRA after learning more about the project. “I was not aware of the details of the project, and after becoming informed, I decided not to continue giving it exposure,” he explained. Argentina’s presidential office has since downplayed the incident, framing it as a routine promotion related to blockchain financing. However, an official inquiry has been launched to examine Milei’s involvement, as well as the role of KIP Protocol in the token’s release. Authorities have formed an investigative task force to assess any potential misconduct.
The situation has sparked accusations from political opponents, with some alleging that Milei orchestrated a classic pump-and-dump scheme. Buenos Aires Governor Axel Kicillof went so far as to call the incident a large-scale financial fraud, comparing it to the recent wave of politically linked memecoins that have disrupted crypto markets.
This scandal has reignited concerns over the growing trend of politician and celebrity-backed cryptocurrencies, which have repeatedly led to significant investor losses. Similar cases, such as former U.S. President Donald Trump’s TRUMP memecoin—which skyrocketed to a $72 billion market cap before crashing—highlight the financial risks associated with high-profile endorsements in an unregulated market. Melania Trump’s MELANIA memecoin followed a similarly volatile trajectory, further underscoring the dangers.
As scrutiny intensifies, calls for greater oversight and transparency in the crypto space continue to gain momentum. Investors and regulators alike are demanding more stringent measures to protect against potential exploitation, ensuring that political figures and public personalities are held accountable for their influence on financial markets.
By Alejandro Silva Ramírez, Crypto Analyst & Columnist