Crypto Wallets Linked to Libra Withdraw $99 Million Amid Controversy in Argentina
Feb 19, 2024 — In a dramatic turn of events enveloping the Libra token, approximately $99 million in cryptocurrency was withdrawn from its liquidity pool by several digital wallets associated with the token’s creator. This incident has raised eyebrows in Argentina, particularly following a controversial promotion of the token by President Javier Milei.
A Surge and Subsequent Decline of the Libra Token
On Friday, President Milei took to social media platform X to endorse the little-known cryptocurrency, known as $LIBRA. Following his endorsement, the token experienced a meteoric rise, surging to over $4.50 per token. However, this momentum was short-lived, as the value plummeted within just a few hours. Subsequently, President Milei deleted his post and has since denied any personal connection to the cryptocurrency.
Legal Scrutiny
The dramatic rise and fall of $LIBRA caught the attention of federal authorities, prompting an investigation into the token’s launch and President Milei’s involvement. In the wake of these developments, Milei has accused political opponents of exploiting the situation for their gain.
Blockchain research firm Chainalysis reported that eight wallets withdrew substantial funds from the liquidity pool of the $LIBRA token, indicating a strong connection to its creators. "The on-chain behavior suggests that these addresses are closely related to the Libra creator team, based on the fact that those addresses were funded directly from the Libra token creator," a spokesperson from Chainalysis stated to Reuters.
Details on Withdrawals and Current Holdings
According to Chainalysis, while the exact timing of the withdrawals remains unclear, they involved the stablecoin USDC and another cryptocurrency known as SOL (Solana). The dollar value of these funds may fluctuate as the prices of the tokens change.
Another blockchain analytics firm, Nansen, added that the wallets that withdrew the tokens still retain a combined value of approximately $87 million. It stated, "It is fair to say that there is still a lot of money in the hands of those related to the Libra launch." Notably, data from Nansen revealed that from Sunday to Tuesday, around 70% of wallets trading $LIBRA reported losses.
Insights from a Key Figure
Hayden Davis, who previously described himself as a "launch advisor" for $LIBRA, claimed on his previously available LinkedIn page that he managed funds worth up to $100 million from the Libra marketplace. In a statement via X, Davis expressed his intention to reinvest the funds back into the token and emphasized that he had no plans to benefit personally from the withdrawals.
In a subsequent interview with YouTuber Stephen Findeisen, known online as "Coffeezilla," Davis rejected claims that the situation constituted a "rug pull," a term used to describe a type of scam where project backers withdraw funds after artificially inflating the token’s value. Instead, he characterized the situation as a poorly executed plan. "It’s not a rug. It’s a plan gone miserably wrong with $100 million sitting in an account that I’m the custodian of," he stated.
Conclusion
The situation surrounding the $LIBRA token underscores the volatility and uncertainty inherent in the cryptocurrency market. With investigations under way and political implications looming, this story is far from over. The developments call into question the intersection of politics and cryptocurrency, as well as the responsibilities of those who promote and launch digital tokens. As the market continues to evolve, the actions of key figures and the responses from regulatory bodies will likely shape the future of cryptocurrencies in Argentina and beyond.
Reporting by Elizabeth Howcroft in Paris and Hannah Lang in New York; additional reporting by Lucinda Elliott in Uruguay. For further inquiries, contact the reporting team.
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