- A memecoin marketer admits to front running the LIBRA token he helped launch, profiting $100 million.
- Argentine President Javier Milei endorsed the coin on Friday.
- The same team responsible for LIBRA also launched a memecoin for Melania Trump last month.
A crypto marketer who orchestrated the launch of a memecoin associated with Argentina President Javier Milei faces backlash for manipulating the token’s price and giving insiders unfair advantages.
Hayden Davis admitted to being part of a team that launched multiple high-profile memecoins, including one Melania Trump issued last month, which soared to a $2 billion market value before crashing 90%.
In an interview with YouTuber Stephen Findeisen, known online as Coffeezilla, Davis said that his team bought up the LIBRA and MELANIA tokens immediately after launching them, a move known in crypto circles as sniping, or frontrunning.
“When we’re sniping, we’re attempting to avoid other snipers getting in,” Davis said.
“A lot of times it’s to protect — and if there’s enough volume — to take some off so people can have a chance to pump the chart back up.”
Outside the law
In regulated financial markets, front running and market manipulation are often illegal, with penalties including hefty fines, licence revocations, and potential criminal charges.
But for memecoins, which operate outside of any regulatory regime, it is unclear whether such rules apply.
On Friday, investors piled into the LIBRA token, which received a since-deleted endorsement from Milei, and drove it to a $4.5 billion market value within an hour.
But soon after, its price suddenly crashed 80%.
Davis said his team, which launched the memecoin, sold the stash they obtained through frontrunning and pocketed $100 million.
“It’s all fucking rigged man,” Ash Crypto, an influencer with over 1.6 million followers on X said of the LIBRA token.
“All these stories about some guy [who] put in $1,000 and made $5 million from memes is complete bullshit and it’s all insiders.”
In the interview, Davis said that in addition to him, two organisers of Tech Forum, a Latin American-based tech conference, were also involved in the LIBRA launch.
Tech Forum did not immediately respond to a request for comment.
Denied involvement
In a statement shared with DL News, KIP Protocol, a company that sponsored the Tech Forum conference, denied any direct involvement in the LIBRA token.
The firm said it “did not initiate the project, did not manage or direct the token launch process, and did not receive any tokens pre or post-launch.”
The company also said it had no business dealings with Davis before this.
DL News didn’t independently verify these claims.
Representatives of Donald Trump and Melania Trump did not immediately respond to a request for comment.
Milei could not be reached for comment.
An ‘open secret’
After the LIBRA token crashed, several parties said they had known about the launch ahead of time.
“It was an open secret in memecoin circles that an ‘Argentina Coin’ was going to launch at some point,” Jupiter, a Solana DeFi app, said in a statement on X.
Jupiter said that none of its employees knew the time of the launch in advance.
“We have conducted our own investigation and cannot find any evidence of sniping by team members,” the post said.
‘The people who benefit the most are the people who structure the deal.’
— Hayden Davis
When a new memecoin launches, those who buy it early stand to make the biggest return if the memecoin continues to rise in price and they manage to sell it early enough.
Understanding that LIBRA was going to launch and would be endorsed by a high profile figure like Milei gave those in the know an unfair advantage in profiting from the launch.
When Findeisen asked Davis about the launch being shared with select people ahead of time, he brushed off the notion that he did anything wrong.
“There’s always an unfair advantage,” Davis said, “There’s an unfair advantage if you’re a genius onchain.”
“The people who benefit the most are the people who structure the deal. The people that get mad aren’t insiders.”
Insider refunds
It’s not just Davis sharing the LIBRA launch ahead of time with insiders that has drawn people’s ire.
Social media personality Dave Portnoy, who recently started promoting memecoins, said in an X post that Davis had personally refunded him $5 million that he had lost investing in the LIBRA token.
“Hayden made it clear he was paying me from his personal money,” Portnoy said in an X post. “If you get robbed and somebody is like ‘I can get your shit back,’ you take it.”
‘Market participants are now moth-like.’
— Jordan Fish
In the interview with Findeisen, Davis said refunding Portnoy was a “mistake.”
In a video posted to X, Davis said he planned to use the $100 million his team profited from through frontrunning to buy LIBRA tokens on the market in an attempt to recompense investors.
“My intent is to inject everything back into the LIBRA chart,” he said.
‘Moth-like’ investors
Memecoins have soared in popularity over the past year and a half. Such tokens, usually based on a popular figure or online joke, often explicitly detach themselves from any promise of gaining value.
High-risk investors pile into memecoins due to their extreme volatility and the potential for buyers to make life-changing money quickly.
Early memecoins like Dogecoin were created as jokes, and were never intended to reach multi-billion dollar valuations.
More recent memecoins, however, are often highly-coordinated endeavours with dedicated marketing teams, with the goal of profiting off the star power of famous individuals.
In December insiders sold millions of dollars worth of influencer Haliey Welch’s Hawk Tuah token, crashing its price.
Knowing scams
Investors in such memecoins increasingly understand them to be rigged by insiders, but buy them anyway, according to Jordan Fish, founder of early stage crypto investing platform Echo.
“Market participants are now moth-like,” he said. “They actively rush into these scams, mostly knowing that they are scams, because the goal is to flip the scam for a 3x to somebody else.”
Nic Carter, a general partner at crypto investing firm Castle Island Ventures, said the outrage directed at the LIBRA token is down to the wrong set of insiders profiting.
“The bellyaching around the Milei Libra coin is simply that it was launched by an outgroup and enriched no one in the ingroup,” he said in an X post.
“If this is the catalyst for finally abandoning memecoins, it’s for the best and we should all write him a thank you letter.”
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.