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Milei’s Crypto Controversy: How a Memecoin Sparked a Political Storm
The Libra Token Scandal: Argentina’s President Faces His Biggest Crisis Yet
Argentine President Javier Milei has landed in hot water after endorsing a so-called memecoin called Libra, which surged in value before crashing spectacularly. Despite denying any intent to promote the token as an investment, his social media post triggered a frenzy, causing the token’s value to skyrocket fourfold before plummeting—leaving investors with major losses.
In a Monday night interview with Todo Noticias, Milei defended himself, stating he only wanted to highlight the initiative’s goal of supporting Argentine businesses through cryptocurrency.
“I’m not an expert. My specialty is economic growth, with and without money,” Milei said. “As a tech enthusiast, I saw a potential tool to fund entrepreneurial projects and simply spread the word.”
A Social Media Post That Backfired
On Friday night, Milei shared the Libra token with his millions of followers, inadvertently fueling a speculative boom. Within hours, its market capitalization surged to $4 billion, only to collapse just as quickly, sparking outrage among traders and political opponents alike.
The Argentine government has now launched an internal investigation, while Milei’s critics are calling it the worst crisis of his presidency so far. Recognizing the gravity of the situation, Milei admitted he may need to rethink his accessibility.
“The most important lesson is that I can’t keep being the same Javier Milei as always,” he admitted. “Sadly, I have to put up more filters so that it’s not as easy to reach me.”
While the public demanded answers, the presidential palace remained silent for much of Monday. Economy Minister Luis Caputo was the first to address the issue, downplaying its significance.
“Cryptocurrencies are a tiny, infinitesimal world. It’s a world of specialists that’s very hard to understand,” Caputo said. “I don’t understand crypto either, and it’s been explained to me 800,000 times.”
Political & Market Fallout
Caputo assured the public that the incident wouldn’t impact Argentina’s markets, emphasizing that no overseas investors had even inquired about it. However, back home, the reaction was swift. Investors dumped shares in Argentina’s largest companies, and the S&P Merval Index suffered its worst single-day drop since July, plunging 5.6% on Monday.
As criticism mounted, the government tried to shift focus to its economic achievements. Milei posted about Argentina’s January budget surplus, hosted US Senator Steve Daines, and reshared a Donald Trump post featuring one of his own quotes.
Yet, despite these efforts, the Libra debacle remains a major embarrassment for the libertarian president, who had previously enjoyed strong public support while implementing drastic spending cuts.
Was Milei Scammed?
Some of Milei’s allies suggested that the president himself was misled by those behind the token. Meanwhile, Hayden Davis, CEO of Kelsier Ventures, which helped launch Libra, claimed that the launch was coordinated with Milei’s team.
Speaking in an interview with Barstool Sports founder Dave Portnoy, Davis said he was still seeking an explanation from the government. Portnoy, who suffered heavy losses and called the token “the biggest rug pull of all time,” revealed that Davis personally refunded him.
While Davis maintained that Milei was not corrupt, he suggested that people close to the president were responsible for the chaos.
“I firmly believe he’s not corrupt,” Davis stated. “I don’t think Milei even fully knows what’s going on.”
Legal Action & Investigations
The fallout from the Libra scandal has now moved into the legal arena.
Max Burwick, managing partner at Burwick Law in New York, said his firm is representing hundreds of investors exploring financial recovery options.
Moyano & Asociados, a local Argentine law firm, has filed a complaint with the US Securities and Exchange Commission (SEC).
An Argentine judge has been assigned to investigate over 100 legal cases filed against Milei.
The opposition has called for an impeachment trial, though it remains unlikely as it would require a two-thirds majority in Congress.
Conclusion: A Costly Misstep for Milei?
Milei’s embrace of technology and his unfiltered communication style have been key elements of his appeal. But the Libra controversy has exposed the risks of his open-door approach. Whether this will significantly damage his presidency remains to be seen, but one thing is clear—the crypto scandal has put him on the defensive like never before.
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