Argentina’s President Javier Milei is at the center of a major cryptocurrency controversy after promoting the token $LIBRA, which quickly crashed in value. The fallout has sparked allegations of fraud, legal action, and calls for impeachment, raising concerns about Milei’s judgment and potential involvement in the debacle.
The Controversy Unfolds
Milei endorsed $LIBRA on X (formerly Twitter), suggesting that the cryptocurrency could help Argentina’s struggling economy. Following his post, the token’s value surged to nearly $5, attracting a flood of investors. However, within hours, $LIBRA’s value plummeted, wiping out millions in investor funds. In response to the backlash, Milei deleted his post and distanced himself from the project, claiming he was unaware of the token’s specifics and had no connection to the company behind it.
Allegations of a “Rug Pull”
Critics argue that the $LIBRA crash was a classic “rug pull,” a type of cryptocurrency scam where developers hype up a token to attract investors before vanishing with the funds. Cryptocurrency security expert Pablo Sabbatella pointed out that $LIBRA’s website was registered only shortly before Milei’s endorsement—an indicator often associated with fraudulent projects.
Legal and Political Fallout
The scandal has led to serious legal and political consequences for Milei and his administration:
- Impeachment Calls: Opposition parties have demanded Milei’s impeachment, accusing him of endorsing a fraudulent scheme that led to massive financial losses.
- Fraud Charges: Lawyers have filed legal complaints, alleging that Milei’s promotion of $LIBRA facilitated criminal activity.
- Government Investigation: Argentina’s Anti-Corruption Office (OA) has launched an investigation to determine whether any government officials, including Milei, were involved in misconduct.
- Political Fallout: The Lower House Speaker, Martin Menem, who reposted Milei’s endorsement, is also under investigation.
Financial Losses and Potential Legal Consequences
The collapse of $LIBRA led to significant financial turmoil, with some investors making millions while others lost substantial amounts. Reports suggest that around $107 million may have been extracted in what some are calling an orchestrated scam.
If Milei is found guilty of fraud, he could face severe legal repercussions under Argentine law, including:
- Fraud Charges: Under Article 172 of the Argentine Penal Code, fraud carries a prison sentence of up to six years, with harsher penalties for public officials.
- Conspiracy to Commit Fraud: Article 210 criminalizes fraud conspiracies, which could apply if multiple individuals were involved in the alleged scheme.
- Bribery Allegations: If evidence surfaces that Milei or his associates benefited financially from $LIBRA’s promotion, bribery charges could be filed under Articles 256-259 of the Penal Code.
- Civil Claims: Victims of the crash may pursue damages under Argentina’s Civil and Commercial Code, seeking financial compensation.
- Corporate Liability: Law 27,401 holds companies accountable for financial crimes, meaning any entities involved in $LIBRA’s launch could face fines, suspension, or bans from government contracts.
Ongoing Investigations
Authorities continue to probe the full scope of the incident, focusing on the involvement of government officials, party members from La Libertad Avanza, and other key figures. A special investigative unit within the presidency has been formed to examine the origins of $LIBRA and the individuals behind its rapid rise and fall.
An NGO has also filed a lawsuit, accusing Milei and others of illicit association, fraud, and breach of public duty.
What’s Next for Milei and Argentina?
Milei’s involvement in the $LIBRA controversy has cast a shadow over his presidency, with critics questioning his decision-making and credibility. Whether the investigations will lead to criminal charges, impeachment, or political damage remains to be seen, but one thing is clear—Argentina’s leader is now facing one of the biggest challenges of his tenure.
As the case unfolds, the world will be watching closely to see how Argentina handles the intersection of politics and cryptocurrency in an era of growing financial innovation and digital asset regulation.
