Milei’s Crypto Controversy: $Libra Soars and Crashes, Sparking Political Fallout

Argentine President Javier Milei has ignited significant controversy by promoting the cryptocurrency $Libra on his social media platforms. In a message to his 3.8 million followers on X (formerly Twitter), Milei announced the launch of $Libra, describing it as a private initiative aimed at stimulating Argentina’s economy by funding small businesses and startups. He provided a link to the project’s website and detailed instructions for potential investors interested in purchasing the token through the Solana cryptocurrency wallet. This endorsement led to a rapid influx of investments, causing $Libra’s value to skyrocket before it abruptly plummeted, resulting in substantial losses for many investors.

$Libra is classified as a “memecoin,” a type of cryptocurrency without any underlying asset, relying instead on public enthusiasm surrounding a person, movement, or internet phenomenon. Following Milei’s promotion, $Libra’s price surged to $4.70 within minutes but fell to $0.19 just hours later. This pattern has raised suspicions of a potential “rug pull” scam, where the asset’s value is artificially inflated to attract investors, only for the promoters to withdraw, leaving latecomers with significant losses. Notably, KIP Network, the company behind the “Viva la Libertad” project associated with $Libra, registered its promotional website just hours before Milei’s announcement, further fueling skepticism about the operation’s legitimacy.

The political fallout has been swift and severe. Opposition figures have accused Milei of unethical behavior, with Socialist Deputy Esteban Paulón stating, “On Monday, we will submit the request for impeachment against the president. What has happened is very serious.” Members of Unión por la Patria, aligned with former President Cristina Kirchner, have echoed these sentiments. The centrist Unión Cívica Radical (UCR) party has called for an investigative commission to probe the “possible commission of a crime.” In response, Milei has denied any direct involvement in the development of $Libra, asserting that his promotion was merely an endorsement of a private economic initiative and dismissing the allegations as politically motivated attacks.

The scandal has also exposed potential fractures within Milei’s inner circle, often referred to as the “iron triangle,” comprising the president, his sister Karina Milei, and advisor Santiago Caputo. Reports suggest that individuals close to the president and his sister may have been instrumental in promoting $Libra, leading to internal tensions and raising questions about the administration’s integrity. As judicial investigations unfold in both Argentina and the United States, the incident has sparked a broader debate about the responsibilities of political leaders in endorsing financial products and the urgent need for stricter regulations in the cryptocurrency market to safeguard investors.