Argentina’s President Javier Milei is facing allegations of fraud after promoting the Libra token a cryptocurrency that saw its value skyrocket before an abrupt crash. Investors who bought in at its peak suffered heavy losses leading to accusations that Milei’s involvement misled the public.
The controversy has triggered a legal battle with opposition figures calling for accountability while financial experts examine whether insider trading played a role.
The case is now under investigation raising questions about the ethical responsibilities of political figures in the crypto space.
Fraud Allegations and the Political Firestorm
The legal battle began when a group of Argentine lawyers filed fraud charges against Milei arguing that his public endorsement of Libra was deceptive.
The complaint claims that by promoting the token on social media Milei created the impression that the project had government backing.
Investors who rushed to buy in saw the token’s value surge from fractions of a cent to nearly five dollars only for it to collapse within hours wiping out billions.
Among those filing the charges is lawyer Jonatan Baldiviezo who argues that Milei’s involvement was not a simple mistake but an intentional act of deception.
His team likens the incident to a “rug pull” a common term for crypto scams where early backers hype up a project before abruptly exiting leaving others with worthless assets.
They also claim that Milei’s actions violated Argentina’s Public Ethics Law which prohibits officials from using their position to benefit financially or mislead the public.
Milei deleted his social media post shortly after Libra’s price began to fall later claiming that he had no direct connection to the project.
He stated that his endorsement was simply a show of support for entrepreneurs and that he withdrew it once he realised the risks involved.
However, opposition politicians were quick to criticise him arguing that a president should not engage in speculative crypto promotions without due diligence. Some even called for an impeachment trial a move that could escalate the political stakes if pursued.
Adding to the controversy Milei’s administration confirmed that he had met with representatives from KIP Protocol the developers behind Libra at the presidential office.
While they insist these meetings were informal the revelation has fuelled speculation about the extent of the president’s involvement. The government has now launched an internal anti-corruption probe pledging to cooperate with judicial authorities.
Insider Trading and the Market Fallout
Beyond the legal and political drama, the Libra controversy has also sparked debates over insider trading and the ethics of political figures influencing financial markets.
Investigations revealed that members of Jupiter Exchange had prior knowledge of Libra’s launch and that private groups had been discussing an “Argentina Coin” weeks before Milei’s public endorsement.
Although Jupiter Exchange denied engaging in insider trading the fact that some investors may have profited before the crash has raised further suspicions.
One of the biggest voices in the dispute is Hayden Mark Davis the CEO of Kelsier Ventures and an early supporter of Libra. Davis accused Milei of causing the token’s collapse stating that his sudden withdrawal of support shook investor confidence and led to mass sell-offs.
In a video posted on social media, he claimed that Milei’s team had initially assured backing for the project but later reversed their stance without warning. This sudden change he argued was the primary reason for the token’s downfall.
Despite the turmoil, Davis maintains that he still controls significant Libra funds and has proposed a buyback and burn mechanism to stabilise its value. His attempt to restore investor trust may not be enough however as many who lost money are seeking legal recourse.
Meanwhile, crypto exchanges and regulatory bodies are closely watching the case as it sets a precedent for how political figures should engage with financial assets in the digital era.
The financial implications of the Libra crash extend beyond individual investors. The controversy has cast a shadow over Argentina’s approach to crypto which Milei had previously supported as a tool for economic freedom.
If found guilty of fraud Milei could face severe legal consequences but even if acquitted the damage to his reputation may linger. The case has also highlighted the volatility of crypto markets and the risks involved when public figures wield influence over speculative assets.
Conclusion
As Argentina’s judiciary investigates the case the outcome could have lasting implications for both Milei’s presidency and the broader crypto industry. Whether Milei is found guilty or not the controversy has exposed the risks of political endorsements in speculative markets.
It has also raised critical questions about transparency ethics and the accountability of leaders in the digital economy. With lawsuits mounting and public scrutiny intensifying the Libra debacle is far from over and its consequences may shape Argentina’s financial landscape for years to come.