Argentine President Javier Milei now faces intense political and financial scrutiny after endorsing the cryptocurrency $LIBRA. His promotion of the digital token triggered a rapid price increase, but the subsequent crash erased millions in investor funds. Thousands of investors suffered significant losses, which led to public outrage, legal complaints, and impeachment calls. Critics now accuse Milei of engaging in financial misconduct and misleading the public.
$LIBRA’s Rise and Fall
On February 14, 2025, Javier Milei used his official social media accounts to promote $LIBRA, a newly launched cryptocurrency. He described the project as an initiative designed to support small businesses and drive economic growth in Argentina. His endorsement immediately drew attention from investors and cryptocurrency enthusiasts.
The value of $LIBRA skyrocketed within minutes. The token, which had little to no value before Milei’s promotion, soared to $5 in a short period. Thousands of investors rushed to buy the token, expecting continued growth. However, the price collapse came just as quickly as the rise. Within hours, the token’s value plummeted below $1, leaving approximately 40,000 investors with heavy financial losses.
Milei deleted his promotional post after public outcry and growing criticism. This sudden reversal caused panic among investors, further accelerating the token’s decline. Market analysts later classified the incident as a classic example of a “pump and dump” scheme, where promoters inflate the value of an asset before abruptly abandoning it.
Legal and Political Repercussions
The collapse of $LIBRA prompted swift legal action. Angry investors and opposition groups wasted no time in filing complaints against Milei. Various legal entities, including Popular Unity, accused him of fraud and financial manipulation. In total, over 110 formal complaints now target the Argentine president.
Opposition lawmakers initiated impeachment proceedings, arguing that Milei’s actions had violated ethical standards and damaged public trust. Critics claim that he knowingly participated in a fraudulent scheme commonly referred to as a “rug pull.” This term describes a tactic where promoters hype a cryptocurrency, attract investors, and then withdraw their funds, leaving others with worthless assets.
A federal judge, María Servini, has taken charge of the investigation. Authorities want to determine whether Milei personally benefited from the cryptocurrency surge and subsequent crash. His role in the event remains under intense scrutiny as political opponents demand immediate accountability.
Milei’s Response and Defense
Javier Milei firmly defended himself against allegations of fraud. In a televised interview with Todo Noticias (TN), he compared investing in cryptocurrencies to gambling in a casino. He stated:
“The reality is, if you go to a casino and lose money, what claim do you have if you knew the risks?”
Milei denied any personal involvement in the creation or management of $LIBRA. He insisted that his intention was to spread awareness about the project rather than directly endorse it. According to Milei, he did not profit from the token’s short-lived success and had no connection to its development.
His critics remain unconvinced. They argue that his public endorsement directly influenced the market, creating artificial demand. They also point out that deleting his post in response to criticism caused panic among investors, making the crash even worse.
Company Reactions and Accusations
The company behind $LIBRA, Kelsier Ventures, strongly denied any wrongdoing. Company representatives insisted that the project was legitimate and had the potential to succeed. However, the controversy deepened when Hayden Mark Davis, a representative of KIP Protocol, accused Milei of abandoning the project at a critical moment.
Davis claimed that Milei’s sudden withdrawal of support created mass panic in the market. He argued that the token might have remained stable if Milei had continued supporting it. According to Davis, Milei’s unexpected reversal destroyed investor confidence, leading to the price collapse.
Despite the fallout, Davis and Kelsier Ventures continued to support Milei, stating that the project itself remained viable. They suggested that political dynamics, rather than financial fraud, were responsible for the situation.
Impact on Argentina’s Financial Markets
The $LIBRA scandal shook Argentina’s financial markets. Investors, already dealing with economic instability, reacted negatively to the controversy. The S&P Merval stock index recorded a 5.6% decline after the news broke, reflecting concerns over political uncertainty and financial instability.
Market analysts warned that the scandal could deter future investments and exacerbate Argentina’s economic challenges. The country continues to battle high inflation and currency devaluation, and investor confidence remains fragile. Some experts now predict a long-term negative impact on Argentina’s economic recovery efforts.
Public and Political Reactions
Public backlash against Milei intensified after the $LIBRA collapse. Many Argentinians who had invested in the token felt betrayed by their own president. Social media flooded with angry posts, memes, and demands for Milei’s resignation.
Political opponents seized the opportunity to criticize Milei’s leadership style. They labeled him as reckless, irresponsible, and unfit for office. His far-right political stance, already controversial, faced additional scrutiny due to his involvement in cryptocurrency speculation.
Even within Milei’s own party, some members distanced themselves from the controversy. Certain officials privately expressed concern over his handling of the situation. However, his core supporters defended him, arguing that the media exaggerated the issue and that the scandal was politically motivated.
International Reactions and Comparisons
The $LIBRA incident gained global attention, drawing comparisons to other political cryptocurrency scandals. Observers likened the situation to U.S. President Donald Trump’s failed $Trump memecoin, which faced similar accusations of market manipulation.
Financial experts worldwide weighed in on the controversy. Some emphasized that public officials should avoid endorsing financial products, especially high-risk investments like cryptocurrencies. Others argued that the incident highlighted the dangers of an unregulated crypto market, urging governments to implement stricter regulations.
Regulatory Implications and Future Outlook
The $LIBRA scandal reignited debates over cryptocurrency regulation in Argentina. Critics argued that lack of oversight allowed the situation to unfold. They called for tighter regulations to prevent future market manipulation by public figures.
Lawmakers now discuss potential policies to protect investors. Proposed solutions include mandatory disclosure rules, requiring officials to declare financial interests before endorsing any financial products. Some legislators even suggested banning government officials from promoting cryptocurrencies altogether.
The ongoing investigation will determine whether Milei faces legal consequences. If found guilty of fraud, he could face severe political and financial repercussions. However, if he successfully defends himself, he may emerge with his political base intact.
Conclusion
Javier Milei’s involvement in the $LIBRA scandal sparked widespread controversy, legal scrutiny, and political backlash. His promotion of the cryptocurrency led to a dramatic rise and fall, leaving investors with heavy losses. Legal challenges now threaten his presidency, as impeachment proceedings gain momentum.
Opponents accuse Milei of financial fraud and reckless leadership, while supporters argue that the media exaggerated the situation. Meanwhile, Argentina’s economic markets remain unstable, with investor confidence shaken by the controversy.
The investigation into Milei’s role in the $LIBRA collapse continues, and its outcome will determine the future of his presidency. The incident serves as a cautionary tale for governments worldwide, emphasizing the risks of cryptocurrency endorsements by public officials.
