In a major political and financial controversy, Argentine President Javier Milei is under judicial investigation for his role in promoting the cryptocurrency $LIBRA, which saw a meteoric rise and subsequent crash. The situation has triggered a political firestorm, with accusations ranging from fraud to calls for impeachment. While Milei denies any wrongdoing, the unfolding events have cast a shadow over his administration’s pro-market reforms.
Background of the $LIBRA Controversy
On February 17, 2025, Milei made a public post on X (formerly Twitter) endorsing the $LIBRA cryptocurrency. Following his endorsement, the coin’s value surged as investors flocked to purchase it. However, within hours, $LIBRA’s price plummeted, leading to significant financial losses for thousands of investors. The rapid decline raised suspicions of a possible “rug pull” scam, in which investors are lured into a project only for its backers to exit with substantial profits, leaving others with worthless assets.
Following the debacle, Milei deleted his post and distanced himself from the coin, asserting that he had no direct involvement in the cryptocurrency’s creation or management. Despite his denial, more than 100 complaints have been filed with Argentine and U.S. courts, pushing the judiciary to launch a formal investigation.
The Investigation and Legal Implications
Veteran Federal Judge Maria Servini has been assigned to lead the probe into Milei’s involvement. The investigation is expected to determine whether his endorsement was a coincidence, a misjudgment, or part of a fraudulent scheme.
Several key aspects of the investigation include:
- Potential Fraud and Illicit Association: Observatorio del Derecho a la Ciudad, an Argentine NGO, has filed a lawsuit accusing Milei and government officials of fraud and breach of public duty.
- Financial Losses: Reports estimate that over 40,000 investors collectively lost more than $4 billion in the $LIBRA collapse.
- Possible Links to Crypto Exchange Meteora: The token was launched on Meteora, a crypto exchange that previously listed the controversial $Trump meme coin, which also experienced a boom-and-bust cycle.
Meteora’s co-founder, Ben Chow, denied any organizational involvement with $LIBRA, stating that his firm only provided IT support and assisted with verifying the token’s authenticity.
Political Fallout and Calls for Impeachment
The opposition has seized on the scandal, claiming it demonstrates Milei’s recklessness and potential corruption. Some opposition lawmakers have floated the idea of impeachment proceedings against the president, although political analysts suggest they are unlikely to secure enough votes for such a move.
Consultancy firm Wise Capital labeled the $LIBRA fiasco as “the biggest reputational crisis of Milei’s government”, potentially undermining his reform agenda. His administration had previously gained investor confidence for implementing austerity measures to combat Argentina’s sky-high inflation. The S&P Merval stock index reacted negatively to the controversy, plunging 5.6% in response.
Milei’s Defense and Supporters’ Reaction
Milei and his allies have pushed back against the accusations, claiming that he was misled about the coin and that his endorsement was a result of bad faith actors manipulating the market. A government source insisted that Milei himself was the biggest victim of the fraud, arguing that he frequently promotes private initiatives and will continue to do so in the future.
Milei’s supporters have rallied behind him, dismissing the allegations as a politically motivated attack orchestrated by his opponents. In an X post, the president went on the offensive, stating that his adversaries were attempting to take advantage of the situation and vowed to “kick them in the ass.”
Broader Implications for Argentina’s Crypto Market
Argentina has been a hotspot for cryptocurrency adoption, fueled by the country’s history of economic instability and currency devaluation. Milei himself has long been a vocal supporter of free-market policies, advocating for cryptocurrency as an alternative financial system.
However, this scandal raises critical questions about the intersection of politics and crypto, including:
- Regulatory Oversight: The incident may accelerate calls for tighter regulations on cryptocurrency promotions by public officials.
- Investor Protection: With thousands losing money, there will likely be renewed debates about how to safeguard investors from fraudulent crypto schemes.
- Impact on Market Deregulation: Milei’s government has championed market deregulation, but this scandal may slow down or alter his pro-business agenda.
Comparison to Previous Crypto Scandals
The $LIBRA case bears resemblance to past high-profile crypto controversies, such as:
- Elon Musk’s Dogecoin Tweets: The Tesla CEO’s endorsements led to huge market fluctuations, though he was never accused of fraud.
- FTX Collapse: The disgraced exchange, run by Sam Bankman-Fried, resulted in massive investor losses and criminal investigations.
- Luna-Terra Crash: This notorious cryptocurrency crash wiped out billions and led to criminal probes into its creators.
In all these cases, celebrity endorsements or high-profile figures played a key role in market movements, highlighting the dangers of unregulated promotions in the crypto space.
Conclusion: What Lies Ahead?
The ongoing investigation into Javier Milei’s involvement with $LIBRA will likely shape Argentina’s political, financial, and regulatory landscape in the coming months. While impeachment seems unlikely, the controversy could:
- Weaken Milei’s public trust and reform agenda.
- Drive stricter regulations on crypto endorsements.
- Hinder Argentina’s crypto-friendly reputation.
Regardless of the outcome, this case underscores the risks and responsibilities that come with promoting financial products—especially in the volatile world of cryptocurrency. As Argentina moves toward midterm elections, this scandal could be a defining moment for Milei’s presidency and Argentina’s economic trajectory.
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