Argentina’s President Javier Milei is under scrutiny as a federal judge has been assigned to investigate his involvement with the $LIBRA cryptocurrency, following allegations of fraud. The controversy erupted after Milei promoted the newly launched crypto asset on social media, leading to a surge in its market value before a sharp decline that sparked accusations of a potential scam.
Judge Appointed to Investigate Milei’s Crypto Endorsement
On Monday, Federal Judge Maria Servini was randomly selected to lead an investigation into whether Milei acted illegally by promoting $LIBRA. Some opposition politicians have even suggested that the probe could lead to an impeachment trial, depending on the findings.
The scandal began on Friday, when Milei endorsed the cryptocurrency on X (formerly Twitter), claiming it was designed to boost economic growth by funding small businesses and startups. His endorsement contributed to $LIBRA’s market cap skyrocketing to $4 billion, before the coin’s value collapsed soon after, leading critics to label it a hoax or a rug pull scam.
A rug pull occurs when initial investors or backers artificially inflate a cryptocurrency’s price, only to suddenly withdraw their funds, leaving investors with worthless tokens while the organizers walk away with significant profits.
As $LIBRA’s price crashed, Milei swiftly deleted his post, raising further questions about his involvement.
Government Distances Milei from the Crypto Coin
By Saturday, Milei’s office released a statement denying any direct involvement in the cryptocurrency’s development. It clarified that his post was part of a broader practice of promoting private business ventures, including KIP Protocol, the developer of $LIBRA.
“The president shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina to create jobs and attract investments,” the presidential office stated.
A government official, speaking anonymously to Reuters, defended Milei, arguing that if anyone was deceived in the situation, it was the president himself.
“The only one on the face of this earth who was cheated is Milei,” the official said. “Javier promotes private projects all the time and will continue to do so.”
Critics Accuse Milei of Being Part of the Scam
Despite Milei’s attempts to distance himself, critics argue that his endorsement played a key role in misleading investors.
- The $LIBRA cryptocurrency was sold through a website named vivalalibertadproject.com, which directly references Milei’s campaign slogan, “Long Live Liberty!”
- Lawyer Jonatan Baldiviezo, one of the plaintiffs in the case, accused Milei of personally facilitating fraud, stating that “within this illicit association, the crime of fraud was committed, in which the president’s actions were essential.”
- The Observatorio del Derecho a la Ciudad, an NGO that filed a lawsuit, estimated that the scam affected more than 40,000 people, leading to losses exceeding $4 billion.
Even Hayden Davis, one of the cryptocurrency’s developers, appeared to blame Milei for the coin’s rapid fall.
“Despite prior commitments, Milei and his team unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media,” Davis said in a video statement.
Could Milei Face Impeachment?
While legal experts believe an impeachment trial is unlikely, the investigation could damage Milei’s economic credibility, particularly ahead of Argentina’s 2025 midterm elections.
For his part, Milei dismissed the controversy as a political attack, accusing his opponents of fueling the backlash in a social media post late on Friday.
As the investigation unfolds, Milei’s role in the $LIBRA cryptocurrency scandal will continue to be a focal point, with potential legal and political consequences for his presidency.
