 "Argentine Prez Javier Milei accused of fraud over $LIBRA crypto promotion")
Argentine lawyers have filed criminal fraud charges against President Javier Milei, alleging that his promotion of a cryptocurrency, lesser-known memecoin $LIBRA, led to financial losses for investors.
The lawsuit, submitted on Sunday (local time), accused Milei of participating in an “illicit association to commit fraud” after he promoted the coin on social media, only to delete the post hours later, according to a report by the Associated Press, who saw the filed papers. The incident has also led to public outcry for impeachment of the far-right president who secured the 2023 Argentine election.
What is $LIBRA?
$LIBRA is a cryptocurrency which was developed by KIP Protocol and Hayden Davis. The digital currency can acquired through a website named vivalalibertadproject.com, which referenced Milei’s well-known slogan.
Argentina president endorses memcoin
On Friday, Milei posted on social media platform X about $LIBRA, describing it as a cryptocurrency aimed at strengthen economic growth by supporting small businesses and startups. This endorsement by Milei, whose account boasts 3.8 million followers, led to the price of the coin skyrocketing to $5 from nearly zero.
However, following a strong public reaction, he deleted the post, triggering a sharp decline in the token’s value. According to financial site Dexscreener, the collapse, which occurred mere three hours later, resulted in millions of dollars in losses for investors.
What charges have been filed against Milei?
The fraud charges were filed by lawyer Jonatan Baldiviezo, alongside Marcos Zelaya, engineer María Eva Koutsovitis, and economist Claudio Lozano, a former head of Argentina’s Central Bank. Baldiviezo described Milei’s actions as a classic “rug pull” – a type of fraud in which a cryptocurrency project is abandoned after attracting investors, rendering their tokens worthless.
The lawsuit also claims Milei violated Argentina’s Public Ethics Law, which prohibits government officials from using their position to benefit private enterprises. Criminal justice authorities are expected to assign a judge or refer the case to a prosecutor for further investigation on Monday.
Melei’s response to allegations
As the controversy escalated, Milei’s office released a statement on Saturday, distancing him from the project and claiming he was unaware of its details.
Milei’s administration insists he had no direct involvement in the cryptocurrency’s development and deleted the post to prevent speculation. The President later claimed he did not know the project’s details, attributing the backlash to political opponents trying to exploit the situation.
Statement from President’s office contradicts Milei
However, the President’s Office confirmed that Milei and members of his administration had recently met with representatives of KIP Protocol at the presidential office. The administration has pledged to hand over all information to the judiciary and has tasked Argentina’s Anti-Corruption Office with investigating the matter.
“Davis had no and does not have any connection with the Argentine government and was presented by the KIP Protocol representatives as one of their partners in the project,” the statement read. It said, “The President shared a post on his personal accounts announcing the launch of the KIP Protocol project, just as he does daily with many entrepreneurs who want to launch a project in Argentina to create jobs and get investments. Not having been part of any stage of the development of the cryptocurrency, after the repercussions that the launch of the project had and to avoid any speculation and not give it further dissemination, he decided to delete the post.”
President’s office launches anti-corruption probe
The office also announced the immediate involvement of the Anti-Corruption Office (OA) to investigate potential misconduct by any member of the National Government, including the President himself. In addition, Milei decided to establish an Investigation Task Unit (UTI) within the presidency.
The unit will consist of representatives from various bodies and organisations with expertise in crypto assets, financial activities, money laundering, and related areas. The UTI will work to integrate information and conduct an urgent investigation into the launch of the cryptocurrency $LIBRA, as well as the companies and individuals involved in the operation, the government statement said.
KIP Protocol blame Milei for crypto collapse
Meanwhile, Hayden Mark Davis, one of KIP Protocol’s representatives, accused Milei of causing the cryptocurrency’s collapse. In a video statement, Davis claimed that Milei and his team had initially pledged support but later withdrew it, leading to the market crash.