Investigation Launched into Argentine President’s Crypto Ties
In Argentina, a federal judge has been appointed to oversee an inquiry regarding President Javier Milei’s connections to the cryptocurrency $LIBRA, following allegations of fraudulent activities. On Monday, Federal Judge Maria Servini was selected at random to lead this investigation, which will assess whether or not Milei engaged in any unlawful conduct. Opposition lawmakers have warned that the findings could lead to potential impeachment proceedings against the president.
Scandal Erupts Following Cryptocurrency Launch
The controversy erupted last Friday with the launch of the $LIBRA cryptocurrency. President Milei promoted the new digital coin via his social media platform on X, claiming it aimed to stimulate “economic growth by supporting small businesses and startups.” With this prominent endorsement, the cryptocurrency’s market capitalization soared to nearly $4 billion, but its value soon plummeted, leading some to describe it as a potential scam or fraudulent scheme.
Concerns of a Potential ‘Rug Pull’ Scam
As the value of $LIBRA began to decline sharply, Milei removed his promotional post from social media. Critics have raised concerns that this situation bears the hallmarks of a “rug pull” scam. In such schemes, early investors inflate the value of an asset before pulling out their investments abruptly, resulting in a swift devaluation that leaves later investors with nearly worthless tokens. Typically, those who orchestrate these scams walk away with profits, while the victims suffer substantial losses.
Presidential Office Issues Clarification
By Saturday, Milei’s office released a statement clarifying that the president had no direct involvement in the development of $LIBRA. The statement highlighted that promoting various business initiatives, including those associated with the cryptocurrency’s creator, KIP Protocol, is part of Milei’s commitment to a free-market ideology. The office stated, “The president made a post on his personal account announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs aiming to create jobs and attract investments in Argentina.”
Official Claims Milei is the True Victim
An anonymous government source conveyed to Reuters that if anyone has been victimized by the cryptocurrency’s volatile performance, it is President Milei himself. “He is the only one who has been deceived,” the source asserted. “Javier frequently endorses private projects and will keep doing so.” Nonetheless, critics have pointed out that the cryptocurrency was marketed on a website linked to Milei’s own slogan, “Long Live Liberty!” raising suspicions about his involvement in the project.
Legal Action and Accusations Against Milei
Jonatan Baldiviezo, a lawyer and one of the complainants in the investigation, has placed personal responsibility on Milei for the situation. “In this illicit arrangement, fraud was committed, and the president’s actions played a crucial role,” Baldiviezo stated to The Associated Press. A local NGO, Observatorio del Derecho a la Ciudad, which has also filed a lawsuit, accused Milei of causing significant financial losses for many individuals. “We accuse Milei of being part of an illicit association that orchestrated a scam with the $LIBRA cryptocurrency, impacting over 40,000 people with losses exceeding $4 billion,” the NGO declared on its website.
Developer Blames President for Crypto Collapse
Hayden Davis, one of the developers behind the cryptocurrency, has also indicated that Milei’s actions contributed to its rapid decline. In a video statement, Davis remarked, “Despite prior commitments, Milei and his team unexpectedly altered their stance, withdrawing support and erasing all past posts on social media.”
Potential Political Fallout for Milei
While experts suggest it is improbable that Milei will face impeachment due to this scandal, it could undermine his economic credibility as the country approaches the 2025 midterm elections. In response to the unfolding situation, Milei has attributed the turmoil to his political adversaries, expressing his determination to confront them on social media. “This strengthens our resolve to take action against them,” he stated late Friday.
