- LIBRA token’s value collapsed by over 94% after Argentine President Javier Milei deleted his endorsement post, sparking fraud allegations.
- Milei faces criminal charges, including fraud and price manipulation, linked to the alleged pump-and-dump scheme.
- Amid legal turmoil, Milei requested an anti-corruption investigation, denying direct ties to the LIBRA project despite meeting with its tech consultants.
Argentine President Javier Milei is accused of criminal conduct in promoting cryptocurrency that skyrocketed and collapsed within days, triggering allegations of a pump-and-dump scheme. The scandal concerns the Libertad project native token, Libra (LIBRA), built on the Solana blockchain.
February 14, LIBRA jumped to a market cap of $4.56 billion after Milei backed it on his social media account on X (former Twitter). The euphoria, however, was short-lived. When Milei deleted his post, the token’s value dropped by over 94%, leading to collective financial loss to investors. The crash has led to allegations of price rigging and fraud.
Prominent Argentine lawyers Marcos Zelaya and Jonatan Baldiviezo, engineer María Eva Koutsovitis, and economist Claudio Lozano have filed a criminal complaint against Milei. They allege that he is an accomplice to fraud and that his endorsement was pivotal to the scheme.
Baldiviezo also accused President Macri of violating Argentina’s Public Ethics Law, where officials are compelled to submit declarations of assets that belong to them and interests that could result in a conflict of interest. “Within this criminal group, fraud had been committed, where President Macri’s actions were key,” Baldiviezo stated.
The Associated Press reported that on February 17, the case will be assigned to a judge or referred to a prosecutor for further investigation.
Milei Faces Legal Turmoil Amid LIBRA Token Scandal
Following up on Milei’s legal issues, Argentine lawyer Agustín Rombolá, of law practice Rombola Mangione and political movement Unión Cívica Radical, brought an independent legal complaint. Rombolá accused Milei of fraud, negotiations unbefitting of a public office, rigging of prices, and financial crimes.
Rombolá also revealed plans to initiate a class-action lawsuit on behalf of investors who lost money in the LIBRA collapse.
Despite growing criticism, President Milei called on Argentina’s Office of Anti-Corruption to audit each government official, including himself, to determine if there had been any illegality. The President’s office claims that Milei was not aware of the project’s specifications upon its approval but claims that he was not immediately connected to the company that created the token.
Milei admitted to the meeting on Oct 19 with representatives of the tech consultancy company KIP Protocol, which is linked to the project. The AI-based payment infrastructure company KIP Protocol confirmed that it had facilitated the disbursal of project funds to domestic businesses. Still, it asserted that it had neither created the token nor served as a market maker.
Concerns that the project is unlawful were triggered after researchers discovered that Libra’s internet domain had only been created hours before its token’s launch date without visible ownership information. Opposition legislator Leandro Santoro has seized on the situation, vowing to impeach Milei, escalating the political crisis.
With legal troubles accumulating and possible impeachment on the horizon, Milei’s administration is at a crossroads. The emerging scandal underscores cryptocurrencies’ growing might and volatility in global financial markets and politics. With continuing inquiry, the incident clearly shows the risks of political endorsement within cryptocurrency. Global financiers and policymakers will watch closely as Argentina navigates this intense legal battle.
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