Crypto News

Javier Milei Under Investigation: Allegations of Fraud Linked to $LIBRA Cryptocurrency Collapse

February 18, 2025
Smart Money

Investigation Launched into President Javier Milei’s Alleged Involvement in Cryptocurrency Scandal

Buenos Aires, Argentina – An investigation is underway into President Javier Milei’s association with the controversial cryptocurrency $LIBRA following accusations of fraud that have cost investors thousands. Federal Judge Maria Servini has been appointed to lead the inquiry to determine whether Milei acted illegally when promoting the cryptocurrency.

The scandal erupted following the launch of $LIBRA on Friday, which Milei touted through his social media platform X, claiming it would enhance economic growth by funding small businesses and startups. This high-profile endorsement initially boosted the cryptocurrency’s market capitalisation to a staggering $4 billion. However, the value of $LIBRA plummeted shortly after, leading critics to label it a potential hoax or scam.

Allegations of Fraud and ‘Rug Pull’ Scams

As the value of $LIBRA decreased steeply, Milei swiftly deleted his promotional post, prompting further scrutiny. Critics have raised concerns that this situation reflects a classic “rug pull” scam, whereby early investors artificially inflate a currency’s value only to withdraw their investments abruptly, leaving later investors with worthless assets.

Milei’s official office released a statement on Saturday, attempting to distance the president from $LIBRA’s decline. The statement clarified that Milei was not involved in the actual development of the cryptocurrency and emphasized his routine of supporting various business ventures, including those related to KIP Protocol, the developer of $LIBRA.

“The president shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina to create jobs and attract investments,’ the statement read.

Opposition Figures and Impeachment Talk

Despite the assertions from Milei’s office, legislators from opposition parties are advocating for a deeper investigation, raising the possibility of an impeachment trial depending on the investigation’s outcomes. Jonatan Baldiviezo, a lawyer involved in the lawsuit against Milei, holds the president personally accountable for what he claims was a fraudulent scheme.

“Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” Baldiviezo stated. Moreover, the NGO Observatorio del Derecho a la Ciudad filed a suit alleging that Milei’s involvement cost over 40,000 investors more than $4 billion.

Prominent frustrations were voiced by Hayden Davis, a developer linked to $LIBRA, who claimed that Milei’s unexpected withdrawal of support contributed significantly to the cryptocurrency’s collapse.

Potential Political Ramifications

Experts indicate that while an impeachment hearing remains unlikely due to the complexities of such constitutional processes, the scandal could undermine Milei’s economic authority as he approaches the critical midterm elections in 2025.

In response to the tumult, Milei has defended his actions on social media, attributing the uproar to his political adversaries. “This increases our conviction to kick them in the [a],” he posted, indicative of the charged political atmosphere surrounding the matter.

As the investigation unfolds, it remains to be seen how deeply Milei’s reputation and political standing will be affected by the accusations surrounding $LIBRA and the allegations of fraud. The case highlights the complexities and risks associated with the burgeoning world of cryptocurrencies, especially as figures of authority become increasingly involved.