- Javier Milei faces fraud charges and impeachment calls after promoting a crashed memecoin.
- The people behind LIBRA are fighting against a tsunami of criticism.
- So what actually happened to trigger the chaos?
A president, a crashed memecoin, and death threats.
Those are the ingredients of the latest scandal to rock Argentina, one which crypto insiders have labelled as a “colossal nightmare.”
Javier Milei, who won Argentina’s presidency on a free-market platform in 2023, has found himself at the centre after seemingly promoting LIBRA, a Solana-based token that saw its value plunge 95% over the weekend from $4.5 billion to around $200 million.
Now, Milei faces a criminal lawsuit and calls for impeachment after the crash wiped out billions in retail investor holdings. The people behind the project face similar scrutiny.
Here’s everything we know.
X promotion
The drama kicked off on Friday when Milei’s official X account promoted the project as a way to boost Argentina’s economy by funding small businesses.
However, LIBRA lost nine-tenths of its value after a massive wave of sell-offs.
LIBRA should not be conflated with the failed crypto project with the same name that was championed by Meta and was later rebranded as Diem before being scrapped.
While many retail investors lost their holdings, a handful of insiders seemingly walked away with millions, according to Lookonchain data.
Now, legal action has been filed in Argentina’s criminal court against Milei.
“Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” lawyer Jonatan Baldiviezo, told the Associated Press.
Opposition leaders have called for Milei’s impeachment, accusing him of fraud and violating Argentina’s Public Ethics Law.
Milei pushed back, saying, “I was not aware of the details of the project, and after getting informed, I decided not to continue promoting it.”
The president’s office has announced an investigation into the token’s launch, stating that the Anti-Corruption Office will review all related transactions, ABC reported. The Anti-Corruption Office operates underneath the executive branch.
“All the information gathered in the investigation will be handed over to the judiciary to determine if any of the companies or individuals linked to the project committed a crime,” the president’s office said.
‘Colossal nightmare’
Milei isn’t the only one caught in the crossfire.
Hayden Davis, CEO of Kelsier Ventures, who helped develop LIBRA, said he has faced death threats for his role in the project.
“I have people who are like, ‘Hey, send me a million and a half dollars, or I go kill your family,’” Davis told blockchain investigator Stephen Findeisen, better known as Coffeezilla.
Davis said he hadn’t personally profited from the project, but that he still holds $100 million in the project. He said he wouldn’t take any of those funds for his own personal profit.
“This has been a colossal nightmare for me,” Davis added. “I don’t want anything to do with this at all.”
Davis blamed LIBRA’s collapse on Milei’s decision to delete his promotional post.
“Despite prior commitments, Milei and his team unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media,” Davis said on X.
He also blamed LIBRA’s collapse on “expert snipers” exploiting the launch to extract millions.
Snipers, in this context, are automated traders who use bots to buy large amounts of a token the instant it launches, driving up the price before quickly selling for a profit.
DL News didn’t independently verify that claim.
KIP Protocol denied any direct involvement in the project, saying 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 rejected the description of LIBRA as a “KIP Protocol project.”
The $100 million question
One of the biggest unanswered questions is what will happen to the $100 million in funds still controlled by Davis.
He outlined four possible options in his conversation with Findeisen.
First, he suggested not issuing any refunds and instead donating the money to an Argentine nonprofit.
However, he said this would likely spark backlash.
Second, Davis considered partial refunds based on investor losses, though he said this would be complex and difficult to execute fairly.
His third option is to reinject the funds into the token’s liquidity pool, a controversial move that could allow snipers and early traders to continue profiting while retail investors remained at a disadvantage.
Findeisen pushed back on this idea, saying that would let insiders “buy a bunch of LIBRA coins on the cheap” before the price was artificially inflated.
Davis’ final option is to hold onto the funds until further guidance from Milei’s team.
But Davis claimed he has received “zero” communication from the president or his office.
“I’m making decisions on behalf of the government of Argentina, who’s distanced themselves from this,” Davis said.
Crypto market movers
- Bitcoin has lost 0.8% over the past 24 hours and is trading at $96,370.
- Ethereum is up 2.1% over the same period to $2,765.
What we’re reading
- XRP ripped after SEC acknowledgment. These other three factors are driving its price ― DL News
- Trump Is Having Second Thoughts About His Crypto Council ― Unchained
- Do fundamentals matter in crypto? ― Milk Road
- Abu Dhabi wealth fund climbs Bitcoin ETF leaderboard flexing $460m stake ― DL News
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
