Argentine prosecutors have intensified their pursuit of justice in the growing "Cryptogate" scandal, formally requesting U.S. authorities arrest Hayden Mark Davis, the CEO of Kelsier Ventures and creator of the controversial $LIBRA cryptocurrency. The request comes after blockchain analysis revealed evidence of market manipulation following President Javier Milei's public endorsement of the token, which caused a meteoric rise in value followed by a devastating 90% crash.
The scandal erupted when Milei promoted $LIBRA on his social media platforms, triggering a surge that briefly pushed the token's market capitalization to $4.5 billion. Within hours, the price plummeted, leaving retail investors with estimated losses of $251 million while insiders allegedly extracted $180 million in profits. According to financial analysts, 86% of crypto traders who invested in $LIBRA suffered significant losses.
Prosecutor Eduardo Taiano and judge María Servini are spearheading the investigation, which has expanded to include multiple legal complaints against President Milei, his sister Karina, and other key figures. Davis had previously met with Milei to discuss blockchain technology and AI applications before the scandal broke. Legal counsel Gregorio Dalbon cited Davis as a significant flight risk when filing for the Interpol notice. The opposition coalition has announced impeachment proceedings, while the Anti-Corruption Office is investigating government conduct related to the endorsement.
The legal net widens as Taiano and Servini's investigation engulfs the Milei family, prompting impeachment calls and anti-corruption probes.
Milei has attempted to distance himself from the controversy, claiming he shared the token "in good faith" rather than actively promoting it. The president deleted his original post, but the damage to his reputation appears substantial, with approval ratings dropping 4 points and 77% of Argentines supporting a thorough investigation.
The case has attracted international attention, with the U.S. Department of Justice reportedly launching its own investigation. Argentine lawyers have requested an Interpol Red Notice for Davis, which would involve law enforcement agencies in 195 countries.
Investigators have also uncovered connections between the $LIBRA team and other cryptocurrency projects, including similar token discussions with the Nigerian government. A federal task force has been created for urgent investigation, with prosecutors requesting a raid on the presidential residence to seize electronic devices.
The scandal highlights the risks of political crypto endorsements and may reshape regulations governing political figures' involvement in digital assets.
