The Solana-based LIBRA token, initially promoted by Argentinian President Javier Milei, suffered a catastrophic collapse within hours of its launch. The sudden crash erased $4.4 billion in market capitalization and sent ripples across the broader meme coin market.
A Controversial Launch
The chaos began with Milei’s social media post at 5:01 PM ET, touting LIBRA as a project intended to “boost the Argentine economy by funding small projects.” The token’s website, which was created just hours before the launch, featured a Google Form for funding applications but lacked critical details on tokenomics or ownership transparency. This led to immediate skepticism within the crypto community.
Insider Activity and Liquidity Manipulation
On-chain analysis revealed heavy insider activity, with 82% of LIBRA tokens concentrated in a single cluster. Data from Bubblemaps indicated that insiders extracted $87.4 million in the first three hours through liquidity manipulation. The team opted for Meteora’s one-sided liquidity pools instead of direct market sales, removing USD and SOL while the token price plummeted over 90%.
Key insider transactions included:
- One wallet flipping 1 million USDC into an $8.58 million profit
- Another turning 1.1 million USDC into $6.45 million
- A third address converting 500,000 USDC into $5.15 million
The rapid collapse not only impacted LIBRA holders but also led to declines in other meme coins, including one associated with former U.S. President Donald Trump. Within two hours, over 50,000 wallets acquired LIBRA, contributing to a total market loss exceeding $6 billion during the three-hour crash.
Milei’s Response and Political Fallout
Following the token’s collapse, Milei deleted his promotional post and distanced himself from the project, claiming he was “not aware of the details.” He further described the incident as an attempt by “filthy rats of the political caste” to discredit him.
On-chain analysts later confirmed that the LIBRA team had extracted a total of $107 million. Eight wallets amassed 57.6 million USDC and 249,671 SOL ($49.7 million) through liquidity manipulation and fee claims, marking one of the largest and fastest meme coin collapses in history.
Market Implications
The LIBRA debacle highlights the ongoing risks in the meme coin sector, particularly when projects lack transparency and governance oversight. As authorities and investors assess the damage, the incident underscores the need for due diligence in the rapidly evolving crypto market.
