A federal judge in Argentina has launched an investigation into President Javier Milei’s involvement in the promotion of the cryptocurrency $LIBRA. The probe follows allegations of fraud related to the coin’s dramatic rise and fall in value.
On Monday, Judge Maria Servini was randomly assigned to lead the case, which will determine whether Milei engaged in illegal activities. Some opposition leaders have suggested that, depending on the findings, Milei could even face impeachment proceedings.
Milei’s Promotion and the Rapid Collapse of $LIBRA
The controversy began on Friday when Milei took to his social media account on X to promote $LIBRA, claiming it would support economic growth by funding small businesses and startups. His endorsement helped the cryptocurrency briefly surge to a $4 billion market capitalization.
However, the value of $LIBRA soon plummeted, raising suspicions of fraud. Critics likened the incident to a “rug pull” scam, where investors are enticed to buy into a digital asset, only to see its value crash while early investors profit. As the backlash grew, Milei deleted his original post, further fueling speculation.
Presidential Office Denies Involvement
By Saturday, Milei’s office issued a statement distancing the president from the cryptocurrency. The statement emphasized that Milei had no direct involvement in the project’s development and regularly supports private business initiatives as part of his free-market policies.
“The president shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina to create jobs and attract investments,” the statement read.
An anonymous government official went further, telling Reuters that Milei himself was a victim of the crypto scheme. “The only one on the face of this earth who was cheated is Milei,” the official stated. “Javier promotes private projects all the time and will continue to do so.”
Accusations of Fraud and Public Outrage
Despite these denials, critics argue that Milei played a central role in the cryptocurrency’s rise and fall. They point to the fact that $LIBRA was sold on a website named vivalalibertadproject.com, which prominently features Milei’s slogan, “Long Live Liberty!”
Lawyer Jonatan Baldiviezo, one of the plaintiffs in the case, has accused Milei of direct involvement in fraudulent activities. “Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” Baldiviezo told the Associated Press.
Observatorio del Derecho a la Ciudad, an Argentine NGO that filed a lawsuit, accused Milei of scamming more than 40,000 people, resulting in losses exceeding $4 billion. The group claims Milei used his political influence to mislead the public into investing in $LIBRA.
Even Hayden Davis, one of the cryptocurrency’s developers, appeared to hold Milei responsible for the coin’s collapse. In a video statement, Davis alleged that Milei and his team suddenly withdrew their support, deleting all previous endorsements and triggering a loss of confidence in the asset.
Potential Political Fallout
While legal experts believe an impeachment trial remains unlikely, the scandal could damage Milei’s credibility ahead of the 2025 midterm elections. His reputation as a pro-business leader has taken a hit, and opposition politicians may use the controversy to challenge his economic policies.
Milei, however, remains defiant. In a social media post, he dismissed the accusations as political attacks orchestrated by his opponents. “This increases our conviction to kick them in the [a**],” he wrote, signaling his intent to fight back against the allegations.
As the investigation unfolds, the case is set to test both Milei’s leadership and Argentina’s regulatory stance on cryptocurrency investments.
The Information is Collected from BBC and India Today.
