NEWSLETTER
What is Milei's “Libragate” controversy?
A tweet x of Argentine president Javier Milei resulted in a cryptographic controversy that threatened his political position. It all started when Milei supported the Token Libra in x, describing it as a project focused on boosting economic growth by supporting small businesses and new companies.
Given the 3.8 million followers of Milei and the credibility it contributes as president, the value of the token increased from almost zero to $ 5, briefly reaching a market capitalization of $ 4 billion.
However, the support met a public reaction, which led Milei to eliminate the position only a few hours later. This triggered a massive sale, which caused the value of Libra to fall quickly and eliminate millions in investor funds. The sudden ascent and the fall of Libra expressed concerns about the possible manipulation and the risks of political figures that influence volatile cryptographic markets.
<img alt="It all started with this publication x of Javier Milei (now eliminated)” src=”https://s3.cointelegraph.com/storage/uploads/view/598af3bc3967e6eda045e046075fb313.png” title=”It all started with this publication x of Javier Milei (now eliminated)”/>
The Live La Libertad project, which is associated with the Token de Libra, includes the popular phrase of Milei la Libertad (which means “freedom of long life” in Spanish) in the domain name. The declared purpose of the project was to channel funds for Argentine investors and citizens in a decentralized manner. Its tokens distribution allocated 50% tokens for the growth of Argentina, 30% for liquidity and 20% for the treasure.
Team behind Libra Token
Hayden Davis is a 28 -year -old American developer and CEO of Kelsier Ventures and had an important role in launching the controversial Memecoin Libra. He said he was an advisor to Milei, although the latter's office denied such a connection. It is also said that Davis has a role in the launch of Memecoin de Melania Trump, Melania.
However, the KIP Protocol denied its participation in a statement published on February 24 through its Mango x. The company declared that it was invited by Mauricio Novelli on February 13, 2025, for support in the financing of small and medium Argentine companies, but had nothing to do with the creation of Token.
Dave Portnoy, founder of Barstool Sports, said someone connected to the launch of Memecoin de Libra to discuss possible promotional opportunities. A cryptographic firm headed by an anonymous “meow” was also involved in the launch.
Did you know? The Libra incident has caused comparisons with the launch of the Trump currency, which is associated with US President Donald Trump. That company also involved a memory, which experienced a rapid increase in prices followed by a strong decrease.
Accusations against President Milei about the memecoin scam of Libra
The Argentine President, Javier Milei, faces serious accusations after his support for the Libra cryptocurrency. Critics have described the incident as a possible rugpull scam, claiming that investors were attracted to Milei's support for Token and invested in the Token before collapse, leaving many with coins without value.
The lawyer Jonatan Baldiviezo, together with Marcos Zelaya, engineer María Eva Koutsovitis and economist Claudio Lozano, a former head of the Central Bank of Argentina, filed a lawsuit against President Milei, accusing him of fraud.
Baldiviezo reclaimed His actions were fundamental in an “illegal association” with the promoters of the currency. The non -governmental organization observatory of the right to the city echoed these concerns, presenting a case that accused Milei of playing a key role in a scheme that allegedly caused more than 40,000 investors to lose more than $ 4 billion.
Even Davis, one of Libra's developers, said that Milei's steep support contributed to the Token accident, which implies the treason of the president's team.
Latin American leaders also expressed concern, with the president of Mexico, Claudia Sheinbaum, which indicates that “it is extremely serious if confirmed, particularly regarding the authority of a president to promote something private.”
As reported, it is under investigation in Spain about its participation in the Libra cryptocurrency scandal. The accusations include fraudulent operations, market manipulation and domestic trade after the pound value was blocked, which resulted in significant losses for investors.
How did Milei put his defense?
In response to the accusations, Milei and his office firmly denied any irregularity. A statement from the president's office emphasized that Milei was not involved in the development of LIBRA and that his publications on social networks simply reflected their broader support for companies.
The statement indicated that Milei regularly promotes commercial projects as part of its free market philosophy. His support of the KIP protocol, developers behind Libra, was part of the broader policy.
An anonymous government official defended Milei in communication with Reuters, arguing that if someone had been deceived in this situation, he was the same president. The official emphasized that Milei often supports private initiatives and will continue to do so. In a publication on social networks, Milei ruled out the controversy as a political motivation attack by his opponents.
Despite these defenses, public skepticism about Milei is still high. Critics argue that Milei's massive influence on social networks should have the responsibility, especially with respect to financial backups. The scandal has caused a broader debate about the ethical obligations of political figures in the volatile cryptographic space, and many question whether Milei's promotion was imprudent or intentional.
Did you know? Facing criticism, Milei responded by accusing his political adversaries, whom he disparagingly described “dirty rats of the political caste”, of trying to exploit the situation with his own malicious purposes.
Research on scandal and possible repercussions
The consequences of the approval of President Milei of the Libra cryptocurrency have triggered a formal investigation and <a target="_blank" href="https://x.com/diputados_uxp/status/1890815209482154341?s=46&t=MCxvKvLAxM5Pan9KNf6IjA” rel=”noopener noreferrer nofollow” target=”_blank”>calls for your accusation. Federal judge María Servini leads the investigation, examining whether Milei participated in fraudulent activities related to the sudden increase and accident of the file.
In particular, the project is under investigation by the United States Department of Justice for potential fraud and market manipulation. The investigation, directed by the fraud section, can be expanded to involve agencies such as the Federal Research Office, Bag and Securities Commission and National Security Department.
While some opposition politicians have requested a trial of political trial, this result seems unlikely. However, the controversy could damage Milei's economic credibility, especially when Argentina approaches the mid -period elections of 2025.
In addition to the Judiciary, the Administration of Milei has established its own investigation task unit (UTI), composed of representatives of financial, legal and anti-lath of money. The Anti -Corruption Office has also been activated to investigate the potential misconduct by government officials, including the president. The urinary infection will investigate the launch of Libra, focusing on the people and entities behind the project.
Did you know? This cryptographic scandal threatens to damage the public image of Milei, which he cultivated as a reformist economist who promises to control the unbridled inflation and political corruption of Argentina.
Is Libra a carpet?
The controversy of Libra reflects a classic pull of the carpet, where developers artificially inflated the value of the Token only to drain their liquidity, leaving investors with mass losses, echo of incidents such as Hawk Tuah (Hawk) and Froggy (Froggy), where the exaggerated masked the hidden risks.
The pulls of carpets are common in decentralized finance projects (Defi) where liquidity groups play an important role. The scammers generally create exaggeration around the file using social networks, influential and sometimes false endorsements. When many investors buy cryptocurrencies and prices, developers sell their shares, get great profits and leave investors having tokens without value.
While it is suspected that Milei's “Libragate” scandal is a pull of the carpet, there have been several pulls of high profile carpets in the cryptocurrency. For example, Hawk Tuah (Hawk) arrived at the headlines after an incident of the carpet. Launched by the celebrity of Haliey Welch social networks on December 4, 2024, its value was blocked from $ 500 million to $ 60 million in just 20 minutes. The incident caused a generalized reaction of the online community and the legal authorities.
Similarly, Froggy (Froggy) became one of the largest carpets of 2024. Its playful brand and fast -gain promises attracted many investors. Developers fed emotion on platforms such as x and Reddit, presenting it as a project promoted by the community with strong support.
But once enough funds gathered, they drained liquidity, which caused the value of Token Collapsara. Froggy (Froggy) finally suffered a devastating fall of 99.95% of $ 0.00001577, its maximum price.
