TLDR
- President Milei of Argentina promoted cryptocurrency $LIBRA on social media, which crashed hours later causing millions in losses
- Lawyers filed fraud charges against Milei, claiming an illicit “rug pull” operation
- Eight insider wallets cashed out $107 million before the crash, wiping out $4 billion in market value
- Jupiter Exchange knew about the token launch 2 weeks before through Kelsier Ventures
- Opposition lawmakers are calling for Milei’s impeachment over the scandal
Argentine President Javier Milei finds himself at the center of a growing controversy after promoting a cryptocurrency that crashed within hours of his endorsement, leading to fraud charges and calls for his impeachment.
The incident began on Friday when Milei posted on social media platform X about $LIBRA, describing it as a cryptocurrency aimed at “encouraging economic growth by funding small businesses and startups.” The post was deleted hours later, but not before the currency’s value plummeted, resulting in substantial losses for investors.
According to financial tracking site Dexscreener, the collapse caused millions of dollars in losses. Blockchain data revealed that eight insider wallets cashed out $107 million in liquidity before the crash, contributing to a $4 billion market cap wipeout within hours.
The cryptocurrency was developed by KIP Protocol and Hayden Davis, with investors directed to a website called vivalalibertadproject.com. The name referenced Milei’s well-known closing phrase for speeches and social media messages.
In response to the incident, lawyers Jonatan Baldiviezo and Marcos Zelaya, along with engineer María Eva Koutsovitis and economist Claudio Lozano, filed fraud charges against Milei in criminal court on Sunday. The legal team alleges an illicit association to commit fraud, with Baldiviezo stating that the president’s actions were “essential” to the scheme.
The lawyers identified the operation as a “rug pull” – a term used in cryptocurrency circles when developers launch an attractive token to attract investors but abandon it after funds become overpriced, leaving the tokens worthless.
An Open Secret?
Jupiter Exchange, a decentralized exchange, revealed that the launch of $LIBRA was an “open secret in memecoin circles” for approximately two weeks before its public debut. The exchange stated they learned about it directly from Kelsier Ventures.
Blockchain analysis firm Bubblemaps had issued warnings about $LIBRA’s structure before the meltdown, pointing out that 82% of the supply was unlocked and available for sale from the beginning.
The President’s Office responded to the controversy with a statement explaining that Milei was not involved in the cryptocurrency’s development. They acknowledged that Milei and administration members had met with KIP Protocol representatives at the presidential office.
On $LIBRA
Since the start, Jupiter has always placed a massive premium on transparency. The memecoin launch game is a dirty game with plenty of ugly behavior. We, however, have nothing to hide.
So here are the facts as clearly as we can say them.
A few members of the…
— Jupiter (🐱, 🐐) (@JupiterExchange) February 16, 2025
Hayden Mark Davis, one of KIP Protocol’s representatives who met with Milei, released a video on Saturday blaming the president for the currency’s collapse. Davis claimed that despite prior commitments, Milei and his team “unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media.”
Opposition lawmakers have seized on the incident, with representative Leandro Santoro announcing plans to launch an impeachment request against the president. Santoro described the episode as a “scandal that embarrasses us on an international scale.”
Milei defended his actions on social media, stating he was unaware of the project’s details and decided to stop promoting it after becoming informed, leading to the deletion of his post. He blamed political opponents for attempting to exploit the situation.
The administration has announced that the Anti-Corruption Office will investigate the matter. They committed to providing all gathered information to the judiciary to determine if any companies or individuals connected to the KIP Protocol project committed crimes.
Criminal justice authorities are expected to assign a judge to the case or refer it to a prosecutor for further investigation on Monday. The case also raises questions about potential violations of the Public Ethics Law.
The incident occurred amid increased retail investor interest in celebrity-endorsed memecoins, following recent launches of tokens associated with U.S. political figures.
