Argentine lawmakers are moving to impeach President Javier Milei following a cryptocurrency scandal that allegedly wiped out hundreds of millions of dollars in investor funds overnight, according to Reuters. The controversy erupted after Milei endorsed the meme coin $LIBRE on X (formerly Twitter), leading to a rapid surge and subsequent collapse in its value, sparking allegations of financial misconduct.
The $LIBRE Crash and Allegations of a Rug Pull
The scandal began late Friday night when Milei publicly endorsed $LIBRE, a meme coin, causing its price to skyrocket from $0.006 to nearly $5 per coin. Thousands of investors rushed in, assuming government backing. However, within six hours, the token plummeted to $0.84, triggering accusations of a rug pull—a fraudulent scheme in which insiders artificially inflate a token’s price before offloading their holdings and leaving investors with losses.
Political Fallout and Impeachment Push
The dramatic collapse of $LIBRE prompted immediate backlash from opposition lawmakers, who called for Milei’s removal.
“This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president,” said opposition coalition member Leandro Santoro.
Despite deleting his endorsement post within hours, the damage was done. Many investors believed the token had official government support. The Argentine Fintech Chamber confirmed that the incident bore the hallmarks of a classic rug pull.
Milei has since distanced himself from the project, stating, “I was not aware of the details of the project, and once I found out, I decided to not continue giving it publicity.” However, opposition leaders remain skeptical of his claims.
KIP Protocol’s Role and Conflicting Statements
KIP Protocol, the company behind $LIBRE, initially denied Milei’s involvement. The blockchain firm, backed by Animoca Ventures in Hong Kong, described $LIBRE as a private initiative with no governmental ties.
“President Milei was not and is not involved in the development of this project,” KIP Protocol stated on X.
However, the firm later acknowledged that Kelsier Ventures, led by Hayden Davis, was responsible for the token’s launch and market-making. KIP Protocol maintained that it did not hold any $LIBRE tokens and was only providing post-launch infrastructure for AI-driven projects. Meanwhile, KIP Protocol officials reported receiving threats following the token’s collapse.
Congressional Investigation Gains Momentum
With the impeachment effort gathering steam, lawmakers are demanding transparency regarding who profited from $LIBRE’s rapid rise and fall. Critics argue that Milei’s endorsement, even if indirect, misled the public and caused severe financial damage.
Former President Cristina Fernández de Kirchner weighed in, condemning the situation:
“Thousands who trusted him lost millions, while many made fortunes due to privileged information.”
Milei Orders Official Investigation into $LIBRE
In response to the backlash, the Argentine presidency announced an official investigation into $LIBRE. A government statement disclosed that Milei had previously met with KIP Protocol officials Mauricio Novelli and Julian Peh on October 19, 2024, where they presented their blockchain initiative, “Viva la Libertad.”
Additionally, on January 30, 2025, Milei met with Hayden Mark Davis at Casa Rosada, Argentina’s presidential palace. The government clarified that Davis had no formal ties to the administration and was introduced by KIP Protocol.
Defending his endorsement, Milei stated:
“The President shared a post on his personal accounts announcing the launch of the KIP Protocol project, just as he does daily with many entrepreneurs who want to launch a project in Argentina to create jobs and attract investment.”
To address the scandal, the Anti-Corruption Office (OA) will investigate whether any government officials engaged in misconduct. Additionally, Milei has established an Investigation Task Unit (UTI), composed of cryptocurrency, finance, and money laundering experts, to scrutinize the matter.
“All information gathered will be handed over to the courts to determine whether any individuals or companies linked to the KIP Protocol project engaged in criminal activity,” the statement read.
As the political storm escalates, Milei faces an uphill battle to maintain his presidency. With growing scrutiny over his crypto ties and economic policies, the scandal threatens to reshape Argentina’s political landscape and test the resilience of his administration.
