LIBRA Token Scandal: Milei’s Crypto Endorsement Backfires

Argentina’s President Faces Backlash Over Meme Token Promotion

Argentina’s President Javier Milei is once again at the center of a crypto controversy after his public endorsement of the LIBRA meme token triggered a speculative frenzy, leading to an 89% price collapse and billions in losses. The fallout has fueled concerns over Milei’s influence on the crypto market and his history of promoting dubious projects. 

Milei took to X (formerly Twitter) to promote LIBRA, describing it as a private initiative aimed at supporting Argentina’s small businesses. 

His endorsement ignited a trading frenzy, catapulting the token’s market cap to $4.5 billion within hours. At its peak, LIBRA reached $4.50 per coin before plummeting to $0.50, wiping out nearly all investor gains. The collapse came after blockchain analysts uncovered signs of insider manipulation, with large holders liquidating their positions within minutes of the token’s launch.

Blockchain analytics firm Bubblemaps reported that LIBRA’s development team dumped $87 million worth of tokens while a single wallet controlled a significant portion of the supply. Data revealed that 82% of the total supply was concentrated in a handful of connected wallets, contradicting the project’s claims of decentralization. 

On-chain trackers further confirmed that insiders drained liquidity pools, pocketing $87.4 million in the first three hours. Coinbase’s Head of Product, Conor Grogan, labeled LIBRA a likely scam, pointing out that legitimate projects implement multisig wallets and transparent funding mechanisms—both of which were absent in this case.

Additional red flags surfaced, raising questions about the project’s legitimacy. LIBRA’s official website featured a Google Form for funding applications, an unprofessional approach for a multi-billion-dollar initiative. Domain registration records showed that the project’s website was created just hours before launch and registered for only one year, suggesting a short-lived scheme. Despite links to KIP Network Inc.—a company with prior government partnerships in Argentina—the firm’s exact involvement in the token remained unclear.

As public outrage grew, Milei quickly distanced himself from LIBRA, deleting his promotional tweets and claiming he was unaware of the project’s details. “A few hours ago, I posted a tweet, as I have so many other times, supporting a supposed private enterprise with which I obviously have no connection whatsoever,” Milei stated. “I was not aware of the details of the project and after having become aware of it, I decided not to continue spreading the word (that is why I deleted the tweet).”

The economic fallout from LIBRA’s collapse was swift. The token’s implosion erased $4.4 billion in market value, and the broader crypto market felt the impact. Donald Trump’s TRUMP token saw a market cap decline of over $500 million following LIBRA’s failure. 

Critics accused Milei of recklessly leveraging his political influence to promote a highly speculative asset without due diligence. Opposition politicians seized on the scandal, questioning his economic credibility and judgment. Milei, known for his combative rhetoric, dismissed his critics as “filthy rats of the political caste” while reaffirming his commitment to fighting Argentina’s entrenched political establishment.

This is not Milei’s first brush with crypto controversy. In 2021, he promoted CoinX, a trading platform that promised AI-powered automated trading with high returns. CoinX was later exposed as a Ponzi scheme, with investors losing between $300,000 and $400,000. Argentina’s National Securities Commission ordered the platform to shut down, citing fraudulent activity. Some investors filed lawsuits against Milei, arguing that his endorsement misled them into making risky investments.

The LIBRA token debacle adds another layer of scrutiny to Milei’s crypto associations, raising questions about the responsibility of public figures in influencing financial markets. While he maintains that his endorsement was merely a show of support for private initiatives, the scale of the losses and the project’s structural flaws suggest otherwise. As Argentina grapples with economic instability, Milei’s latest crypto misstep only intensifies the debate over the role of politicians in shaping digital asset markets.

This article has been refined and enhanced by ChatGPT.