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Political career President of Argentina
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The $LIBRA cryptocurrency scandal is an ongoing political scandal that began on February 14, 2025, when the president of Argentina, Javier Milei, promoted a cryptocurrency project called $LIBRA . The price of the meme coin spiked following Milei's promotion but then suffered a severe price drop, leading to allegations of a rug pull scam. This scandal has been dubbed Cryptogate. [1] [2] [3]
In 2021, then-national deputy Javier Milei recommended a crypto platform called CoinX that promised, through automated trading algorithms, to provide high returns of up to 8% per month. CoinX would end up being reported for fraud. [4]
A year after Milei's recommendation, the National Securities Commission banned the financial operation for not having any authorization to offer investments and compared its operation to a Ponzi scheme. Thousands of investors were affected by CoinX and suffered millions in losses. [4] In response to 23 Argentine Federal Police raids on offices and homes in the city of Buenos Aires and the Santa Fe Province investigating the alleged fraud, Milei responded: "I only gave my opinion" . [4]
In 2022, Milei promoted the Vulcano Game NFT gaming project, describing it as "very interesting". The price of the video game company's token, $VULC, went to $0 in the weeks after Javier Milei's announcement. [5]
Javier Milei's original tweet, posted on Friday, February 14, 2025, at 7:01 p.m. Argentina Time, announced the launch of private economic initiative, aimed at stimulating economic growth in Argentina through investment in small businesses and startups. Milei stated that project operated under the token identifier $LIBRA and was structured to facilitate private investment in Argentine enterprises. In the same message he posted the project's associated blockchain contract address. [6] [7]
During the time the tweet remained pinned to President Milei's account, the price of $LIBRA quickly rose from $0.000001 to $5.20. [8] Within a few hours, its price dropped to $0.99. [9] The market cap [note 1] of $LIBRA reached $4.6 billion, then fell to only $162 million by February 15. [10]
The tweet by President Javier Milei that launched the $LIBRA project was shared by the President of the Lower House, Martín Menem, by national deputies José Luis Espert and Damián Arabia, and also among supporters of La Libertad Avanza such as Gordo Dan, Agustín Laje, and Emmanuel Danann. [11]
There was speculation that Milei's account might have been hacked, which was denied by members of La Libertad Avanza such as Lilia Lemoine and then by Milei himself, when he disassociated himself from the project in a later tweet. [9]
On February 17, after a new tweet from Javier Milei retweeting Darío Epstein, the cryptocurrency rose again, only to collapse again. [12]
Twitter users began to use the platform's Community Notes feature to warn users about a possible rug pull scam under the initial promotional tweet. [6]
Hours after the initial promotion, President Milei withdrew his endorsement and deleted the social media post. In a follow-up statement, he acknowledged that he had shared the information without proper verification of the project's details, explaining that he had no connection to the enterprise. The president characterized the incident as one of many routine social media posts he had made before in support of private enterprise initiatives. President Milei criticized political opponents who he accused of attempting to exploit the situation. [13]
At roughly the same time, the company KIP Network Inc. posted a message describing the $LIBRA project as a success, and stated that President Milei had never been involved with the development of the project. [14]
Hayden Mark Davis, advisor to the launch of $LIBRA, stated that the advertising campaign had been previously agreed upon with the president's team, and accused Milei of "betrayal" for abruptly withdrawing his support. [15]
The number of people affected by the project is estimated to be around 44,000. [16]
Seventy percent of the total tokens were in the hands of their creators. A few accounts had profits estimated between 70 and 100 million US dollars in a few hours. It was also learned that there were bots trading the currency, which according to specialists in the crypto market[ who? ] indicates that there were people who had information on when the token would be publicly released come out so they could prepare themselves.
The company behind the token is KIP NETWORK INC, registered in Panama. [6] The CEO of the company KIP NETWORK INC is Julian Peh, a Singaporean citizen who had previously met with Milei at the Libertador Hotel in October 2024. The one who introduced them was Mauricio Novelli, a young trader who has known Milei since at least 2021. [17]
The project granted significant profits for the initial owners who took the opportunity to get rid of the tokens when their price was high, and massive losses for many who invested after being motivated by the Argentine President. The nine founding accounts of the cryptocurrency earned about $87 million obtained from 50,000 people who invested in the cryptocurrency and saw its value disappear, with many media outlets describing the situation as characteristic of a scam. [1] [8] [18]
Several economic experts pointed out that those affected had advanced knowledge of digital currencies, since to access said cryptocurrency it was necessary to have a wallet in Solana, a blockchain known for its low security and reduced operating costs. In addition, the purchase had to be made with the SOL cryptocurrency, which limited participation to people with prior knowledge of the ecosystem. [19]
Mariano Biocca, a specialist in the crypto ecosystem, explained that $LIBRA belongs to a group of assets whose access is considerably complex and requires advanced technical knowledge. According to Biocca, "up to the information we have, there was no person who exchanged pesos for $LIBRA directly," suggesting that investment in this cryptocurrency was not within reach of the general public or the middle class without experience in cryptocurrencies. [20]
The Union for the Homeland (UxP) bloc of deputies has been one of the main promoters of the impeachment initiative for this situation. Through their social networks, they expressed that Milei's participation in the scheme was an unprecedented scandal. Cristina Fernández de Kirchner, former Argentine national president, spoke out on the matter, calling the president "the hook for a digital scam" and questioning his actions in promoting a cryptocurrency of dubious origin from his official account. [21] A second bill to initiate impeachment proceedings was presented by Socialist Party lawmaker Esteban Paulón. [22] However, the initiative does not have enough supporters in the Impeachment Commision to be able to proceed with the proposal. [23]
The Workers' Left Front (FIT) requested the immediate appearance of Milei in the Chamber of Deputies to provide verbal reports on the promotion of what they considered a "million-dollar scam" spread from his social network accounts. [24]
The Civic Coalition, represented by its president Maximiliano Ferraro, distanced itself from the impeachment proposal. Ferraro stated that, although what happened is serious and could constitute crimes such as money laundering or fraud, impeachment was not the solution. Instead, he advocated for ensuring the proper service of justice, and made himself available to collaborate in the relevant investigations. [25]
Republican Proposal (PRO) expressed concern about the incident's economic impact and possible damage to Argentina's credibility. However, they rejected the use of impeachment, calling it "opportunistic." [25]
In the first 48 hours following Milei's initial tweet, 112 criminal complaints were filed in the Supreme Court of Argentina. The accusations against Milei were classified as several crimes under Argentine legislation, such as fraud, criminal conspiracy, and failure to comply with the duties of a public official. [26]
International law firms, such as Burwick Law, organized class action lawsuits on behalf of foreign investors who suffered significant losses following the collapse of $LIBRA. These firms sought to group together affected parties from various jurisdictions to present cases in international courts, arguing that Milei's promotion of the cryptocurrency constituted a deceptive practice that led to detrimental investments. [27]
On February 17, 2025, an Argentine law firm operating in the United States coupled with victims of the cryptocurrency scam, reported Milei and other responsible parties to the United States Department of Justice and the FBI. [28]
'el gancho de una estafa digital'
oportunista
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