Crypto | Feb 18, 2025
Political Turmoil as Argentina’s Presidents Endorsement Leads to Investor Losses, Lawsuits, and Impeachment Calls
As widely reported, Argentina’s President Javier Milei is facing a political crisis after promoting a cryptocurrency called LIBRA, which rocketed in value before suddenly collapsing nearly 97% within hours, however insiders cashed out millions ahead of the collapse, resembling a classic ‘rug pull’ scam. The fallout has led to financial losses for thousands of investors, triggering lawsuits, political backlash, and calls for Milei’s impeachment.
Milei’s administration claims he was unaware of the project’s details but opposition leaders argue that his promotion directly fuelled speculation and losses. With over 100 legal complaints filed at Argentina’s Supreme Court and lawmakers demanding Milei answer questions before Congress, the crisis is deepening.
How the LIBRA Scandal Unfolded
On February 14, 2025, Milei tweeted to his 3.8 million followers, promoting LIBRA as a private initiative to fund small businesses. His endorsement triggered a viral price surge that pushed the token’s market cap to $4.56 billion within minutes.
Behind the scenes however, eight wallets linked to the LIBRA team quietly withdrew $107 million in liquidity, and automated trading bots linked to insiders also bought the token at $0.38 and sold at peak prices generating millions in minutes. Everything signalled that this was an orchestrated exit. Panic spread and LIBRA plummeted from $4.97 to $0.19 within hours, wiping out 74% of investor funds.
See: Crypto scams, DeFi hacks, and rug pulls: Why the crypto industry needs insurtech
Milei deleted his post at 10:38 PM, claiming he had “obviously no connection” to the project and was not familiar with its details. However, critics noted that he had met with the project’s backers just weeks before the launch. By midnight Feb 15 the crash was complete.
Legal and Political Fallout
After the collapse more than 100 legal complaints were filed at Argentina’s Supreme Court accusing Milei of participating in a fraudulent scheme. Opposition lawmakers estimate 40,000 investors suffered financial losses with some losing up to $100,000. The scandal even rocked Argentina’s stock arket with the Merval index dropping 5.6% on February 17. Calls for Milei’s impeachment grew louder with former President Cristina Kirchner branding him a “crypto fraudster”.
Who Else Was Involved in LIBRA?
Two companies were behind LIBRA which were largely unknown in the crypto sector before launching the project.
What Happens Next?
Milei has ordered an internal investigation but critics argue that it’s a political maneuver to deflect responsibility. Argentina’s Supreme Court is investigating whether Milei was involved in the scam or simply made a mistake. If found guilty, he could be impeached or face criminal charges, which could further weaken Argentina’s already unstable economy.
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- Source: https://ncfacanada.org/milei-faces-political-crisis-after-libra-crypto-collapse/
