Argentina’s Congress to Investigate LIBRA Scandal Tied to President Milei

On February 14, 2025, President Milei promoted LIBRA, a meme-based cryptocurrency, on his official social media channels. He described it as a "private project" aimed at "stimulating the growth of the Argentine economy by financing small businesses and Argentine entrepreneurs." This endorsement led to a surge in the token's value, attracting approximately 40,000 investors. However, the value of LIBRA plummeted shortly thereafter, resulting in estimated losses of around $250 million.

Allegations have surfaced suggesting that the cryptocurrency's developers engaged in a "rug pull" scam, wherein insiders profited immensely at the expense of unsuspecting investors. Reports indicate that the founders of LIBRA held 70% of the total supply and sold off their holdings once the price peaked, causing the value to crash by 85% within hours.

In response to the debacle, Argentina's Chamber of Deputies has initiated a comprehensive investigation into the LIBRA scandal. The probe will focus on the government's role in promoting the token, potential market manipulation, and the overall impact on investors. High-ranking officials, including Chief of Cabinet Guillermo Francos, Economy Minister Luis Caputo, Justice Minister Mariano Cúneo Libarona, and the head of the National Securities Commission, Roberto Silva, have been summoned to testify before the committee.

The approval of this investigation marks a significant political setback for President Milei, whose administration has faced mounting criticism over its handling of the cryptocurrency promotion. Opposition parties have seized upon the scandal, with some lawmakers calling for Milei's impeachment, alleging that his actions have embarrassed the nation and undermined investor confidence.

The fallout from the LIBRA fiasco has extended beyond Argentina's borders. A class-action lawsuit has been filed in the United States against the international figures involved in the creation and promotion of LIBRA. The defendants include members of the Davis family from Kelsier Ventures, Julian Peh of KIP Protocol, Benjamin Chow, and Meteora. The lawsuit alleges that these parties orchestrated a fraudulent launch of LIBRA, misleading investors and causing substantial financial harm.

The LIBRA scandal has sparked public outrage, with many investors feeling betrayed by the rapid collapse of the cryptocurrency. Demonstrations have taken place outside the National Congress, with citizens demanding accountability and stricter regulations on cryptocurrency promotions by public officials. The incident has also raised concerns about the potential for similar scams in the burgeoning digital asset market and the need for enhanced investor protections.

As the congressional investigation unfolds, the political and legal ramifications of the LIBRA scandal continue to mount. The probe aims to uncover the extent of the government's involvement and determine whether any illicit activities occurred. The outcome of this investigation could have profound implications for President Milei's administration and the regulatory landscape of cryptocurrencies in Argentina.