YEREVAN (CoinChapter.com) — Argentine President Javier Milei is facing allegations of fraud after endorsing LIBRA, a Solana-based memecoin that crashed by over 90% shortly after its launch. Legal experts, politicians, and financial analysts are scrutinizing the incident, raising concerns about Milei’s involvement and the broader risks associated with political figures promoting cryptocurrency projects.
**How LIBRA Scam Became a National Scandal**
On Feb. 14, 2025, Javier Milei endorsed LIBRA on his X handle, calling it a project that could benefit Argentina economically. His statement led to a surge in $LIBRA’s price, pushing its market capitalization to approximately $4.56 billion.
However, the token’s value plummeted just hours later, wiping out investor funds. Blockchain analysts traced insider activity, showing that wallets linked to LIBRA scam’s development team liquidated $107 million in assets before the crash.
The sudden collapse triggered public outrage, with many accusing Milei of misleading investors. Critics argue that his endorsement provided $LIBRA with legitimacy, leading unsuspecting buyers to invest. Following the crash, Milei deleted his promotional post, but the damage was already done.
**Fraud Allegations and Legal Actions Against Javier Milei**
Argentine lawyers Jonatan Baldiviezo and Marcos Zelaya have filed a criminal complaint against Javier Milei, accusing him of participating in a fraudulent scheme. According to the legal filing, Milei’s involvement violated Argentina’s Public Ethics Law, which prohibits public officials from engaging in financial schemes that could harm the public.
Baldiviezo stated,
“Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential.”
He also emphasized that Milei’s post encouraged thousands of Argentines to invest in a project that turned out to be a potential rug pull.
The complaint argues that Milei’s promotion of $LIBRA was not an innocent mistake but a calculated effort to drive up its value before insiders sold off their holdings. Investigators are now looking into the project’s financial records, including connections between its developers and individuals within Milei’s political circle.
Argentine lawmaker Gabriela Estevez accused President Javier Milei of orchestrating a pump-and-dump scheme, calling it a serious financial fraud designed to manipulate market prices for personal gain.
“What the President did is called pump and dump, and it’s a severe financial fraud,” Estevez stated.
“The creators of the cryptocurrency purchase large amounts at a low initial price. They then artificially drive up its value by misleading investors with false claims about its potential. Once the price surges, they sell their holdings, triggering a sharp decline and leaving other investors with significant losses.”
**Impeachment Threats Grow Amid Milei’s Crypto Scandal**
The $LIBRA controversy has sparked impeachment efforts against President Javier Milei. A political faction has launched proceedings, calling the scandal unprecedented in Argentina’s history.
“Our block of National Deputies decided to move forward with the presentation of an impeachment request against the President of the Nation,” Diputados UP announced on X.
Meanwhile, Buenos Aires Governor Axel Kicillof condemned the incident, describing it as a large-scale financial fraud. He warned that both Argentine and international investors had been misled. Kicillof also compared the situation to a cryptocurrency pyramid scheme, emphasizing the risks of unregulated digital assets.
Opposition leaders have seized on the controversy. Lawmaker Leandro Santoro stated:
“This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president.”
**New Legal Complaints Filed Against Milei Over LIBRA Promotion**
Argentine lawyer Agustín Rombolá, founder and associate of Rombolá Mangione law firm, has filed a separate legal complaint against President Javier Milei for promoting $LIBRA.
In a Feb. 16 statement on X, Rombolá, a political party Unión Cívica Radical member, announced that he had reported Milei for alleged fraud, price manipulation, financial crimes, and negotiations incompatible with public office. He also stated that his firm is preparing a class-action lawsuit for investors who lost money after the token’s collapse.
Argentina’s presidential office has not responded to requests for comment. However, after the token’s sharp decline, Milei requested the Anti-Corruption Office investigate all government officials, including himself, for potential misconduct. According to a statement from the presidential office, the findings will be shared with the courts.
The office further claimed that Milei was unaware of the project’s details when he endorsed it and had no connection to the company behind the token. However, Milei later confirmed that he met with KIP Protocol representatives on Oct. 19 in Argentina, where they informed him about the blockchain project.
**Javier Milei’s LIBRA Background and Connections to KIP Protocol**
KIP Protocol, a Web3 company specializing in AI payment infrastructure, has acknowledged its involvement in the Libertad project, which was featured the $LIBRA token. The token experienced a significant collapse, losing over 95% of its value shortly after launch.
In a statement on Feb. 15, Julian Peh, KIP Protocol’s CEO and co-founder, clarified that the company served as a technical consultancy for the project. Their role was to assist in distributing project funds to local businesses in Argentina. Peh emphasizes that the KIP Protocol did not create the $LIBRA token nor act as its market maker. He also stated that the company did not profit from the token’s sales.
Despite the token’s collapse, Peh affirmed the KIP Protocol’s commitment to continue supporting Project Libertad. The initiative aims to provide financial assistance to small businesses and startups in Argentina, aligning with the project’s original mission.
Data from Bubblemaps reveals that 50% of $LIBRA’s total supply is concentrated in a single wallet.
The on-chain analytics firm also cautioned that at least 82% of the token’s supply remains unlocked, meaning it could be sold at any time, posing a significant risk to investors.
**The Aftermath of LIBRA Scam: Investigations and Market Reactions**
After $LIBRA’s collapse, Argentina’s Anti-Corruption Office announced a formal investigation. The probe aims to uncover whether Milei or his associates financially benefited from the token’s rise and fall.
Meanwhile, the crypto market reacted sharply to the scandal. $LIBRA’s crash triggered panic among retail investors, causing sell-offs in other altcoins. Analysts warn that such incidents could lead to stricter regulations, particularly regarding political endorsements of digital assets.
The investigation into $LIBRA is ongoing. If evidence proves Milei had financial ties to the project, he could face serious legal consequences, including possible removal from office.