Summary
- Argentina’s President Javier Milei is under investigation for supporting the little-known cryptocurrency LIBRA.
- Legislatures and others accuse Milei of conducting a pump-and-dump operation, and some call for his impeachment.
- The government has organized a task group to investigate the incident and determine whether Milei or others committed illegal acts.
Argentina’s President, Javier Milei, is under enormous criticism after backing LIBRA, a relatively unknown cryptocurrency.
His public backing temporarily increased the token’s value before decreasing, prompting charges of fraud and probable legal violations.
Anti-Corruption Office Starts Investigations Into LIBRA Promotion
On February 14, President Milei pushed the LIBRA meme coin on X, stating it would help Argentina’s economy and small enterprises.
His comments caused a jump in the token’s price, with the market capitalization exceeding $4 billion in hours. This rise enabled insiders to pay out more than $100 million in gains.
However, the rise was short-lived. The meme currency had no tokenomics; the website was developed hours before the launch, and more than $87 million was paid out within the first three hours.
The token’s value dropped shortly after, signaling a traditional pump-and-dump strategy.
“Within minutes of the introduction, significant investors began liquidating millions of dollars of LIBRA. This included profits of at least $4 million when LIBRA’s market capitalization soared to $4.6 billion. The Kobeissi Letter reported that the coin plummeted in a literal straight line after setting the peak at 5:40 PM ET.
This sparked widespread criticism, prompting Milei to remove his post and seek to backtrack. The president admitted that he did not completely understand the proposal.
He then stated that after understanding more, he stopped advertising it.
“I was unaware of the project’s contents, and after learning more, I chose not to continue exposing it (which is why I removed the tweet),” the president said.
Argentina‘s presidential administration sought to mitigate the damage by dismissing the incident as a typical commercial promotion involving blockchain finance.
However, officials recognized that Milei had met with Hayden Mark Davis, a person associated with the KIP Protocol, which underpins LIBRA’s infrastructure.
Despite this, the government has launched an inquiry to see whether any officials, including Milei himself, behaved unlawfully. The investigation will also look into whether KIP Protocol, the firm associated with LIBRA, engaged in illegal actions.
In addition, the president has directed the establishment of an Investigation Task Unit (UTI) under the presidency. This group of financial, cryptocurrency, and anti-money laundering professionals will investigate LIBRA’s debut and those involved.
“All evidence acquired during the investigation will be turned over to the courts to establish if any of the firms or persons associated with the KIP Protocol project committed a crime,” the statement continued.
Political Meltdown and Removal Threats
The debate has spread outside the cryptocurrency community, resulting in a political tragedy. Critics contend that Milei’s irresponsible marketing of a speculative asset resulted in financial losses for investors and the general public.
Gabriela Estevez, an Argentine politician, accused him of running a textbook pump-and-dump operation. They classified it as a serious financial scam that manipulated market prices for personal advantage.
“The President committed a significant financial scam known as pump and dump. The ‘crypto’ producers purchase huge amounts of it at the first price. Then they artificially increase its worth by misleading others about its possibilities. When the price rises, the ‘crypto’ producers sell their shares, causing the price to plummet and leaving other investors with losses,” Estevez explained.
The uproar has also resulted in impeachment threats. A political party has launched procedures, claiming that the scandal is unique in Argentina’s history.
“Our block of National Deputies has agreed to proceed with the presentation of an impeachment request against the President of the Nation,” Diputados UP posted on X.
Also Read: Argentina Leads Latin American Cryptocurrency Inflows
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