As Argentina's political landscape trembles under the weight of the "Cryptogate" scandal, President Javier Milei faces growing impeachment pressure following his controversial promotion of the $LIBRA cryptocurrency that cost investors an estimated $250 million.
The president's February 14, 2025 social media endorsement of the token triggered an explosive market reaction, with $LIBRA's value skyrocketing from $0.000001 to $5.20 in just 40 minutes before crashing 85% to $0.99 hours later.
The scandal has exposed troubling connections between government officials and key crypto players. Hayden Davis, CEO of Kelsier Ventures, created the $LIBRA token just minutes before Milei's promotion.
Investigation reports reveal Davis collaborated with presidential advisor Mauricio Novelli and Stream Finance co-founder Diógenes Casares. This triumvirate allegedly orchestrated a classic "rug pull" scheme, with founders holding 70% of the total supply and extracting approximately $87 million from unsuspecting investors.
A calculated scheme orchestrated by insiders who lined their pockets while thousands of investors lost everything.
Federal investigators are scrutinizing transaction records showing the token's market capitalization reached $4.6 billion at its peak before plummeting to $162 million by February 15. Approximately 74,000 investors suffered substantial losses, prompting immediate calls for accountability from opposition leaders who demand transparency regarding government involvement in the project.
Unlike the original Libra cryptocurrency announced by Mark Zuckerberg which was designed as a stablecoin backed by real assets, the $LIBRA token promoted by Milei had no underlying value or reserve.
Milei's defense remains tenuous as he claims he "didn't promote it, just shared it," a distinction observers find unconvincing given the timing and impact of his endorsement.
The president has ordered the Anti-Corruption Office to investigate while a federal judge examines Milei's potential culpability, creating unprecedented constitutional tensions.
International reaction has been swift and critical. The Economist labeled Cryptogate the "first big scandal" of Milei's presidency, while financial analysts warn of lasting damage to Argentina's cryptocurrency regulatory framework.
Critics have pointed out that the original Libra project faced similar political backlash from governments concerned about monetary sovereignty, though Facebook at least attempted to establish regulatory compliance.
Meanwhile, Twitter's Community Notes feature flagged Milei's original post as potentially fraudulent, though the warning came too late for many investors. Financial experts note that investors should have conducted comprehensive research into the token's fundamentals before investing, a critical step highlighted in modern cryptocurrency security guides.
As impeachment discussions intensify, the Office of the President has acknowledged meetings with key players but maintains no direct involvement in the scheme, setting the stage for a political showdown that threatens to derail Milei's administration less than six months into his term.
