Argentina’s president, Javier Milei, recently found himself at the center of a controversy surrounding a cryptocurrency investment project. The project, which was designed to finance small businesses, collapsed on Saturday amidst accusations of fraud. This has led the opposition to call for a “political trial.”
Milei had promoted the project on his social media profiles, with a post that remained visible for over five hours. The post included a link to the “Long live the Freedom Project” initiative, which echoed his own slogan “Long live freedom, fuck.” The message concluded with “The world wants to invest in Argentina. $ Libra,” referencing the name of the token – a digital value unit based on blockchain technology with no backing in real money.
The $ Libra cryptocurrency was billed as a private project aimed at boosting the Argentine economy by financing small companies and enterprises. However, economists, specialists from the Crypto Universe of Argentina, and opposition political figures were quick to criticize Milei, suggesting that the digital asset could be a scam or a Ponzi scheme.
In response to the criticism, Milei decided to stop promoting the project, stating that he had not been fully informed about its details and thus chose not to continue disseminating information about it. This came after he had initially expressed support, which led to an exponential growth in the value of the asset, from tenths to a peak of $4,978.
According to The Kobeissi Letter magazine, about 80% of the $ Libra asset was held by a small group of individuals before Milei’s endorsement. After his message, the original holders began selling, gaining millions, but the asset’s value subsequently collapsed. This phenomenon is known as a ‘Rug Pull’ in the world of negotiable values, where a cryptocurrency is created, given initial liquidity, and then promoted to attract buyers, only for those handling the liquidity to withdraw the money, causing the value to plummet.
Javier Smaldone, a computer specialist and digital influencer known for denouncing pyramid scams, explained that the entire operation likely lasted around two hours, with an approximate volume of $4.4 billion moving. He estimated that around $107 million was taken from those scammed, though he noted it could be more.
The fallout from the collapse of $ Libra has been significant, with the Union Block for the Homeland, led by Peronism, announcing plans to present a request for a political trial against the President of the Nation. Opposition figures, including former president Cristina Kirchner, have denounced Milei, with Kirchner calling him a “Crypto scammer” who operated “as a hook of a digital scam.”
Senator Martín Lousteau pointed out that this was not the first time Milei had promoted assets from the crypto world that ended up being scams, referencing the Coinx platform in 2021, which offered monthly earnings of 8% in dollars and is now under investigation for alleged scam.
As the news unfolded, victims of the maneuver began to share their stories on social media, including American trader and streamer Threadguy, who claimed to have lost $250,000 in the currency. “Today was a difficult day. The president of Argentina (…) scammed us,” he lamented.
