Argentina’s President Javier Milei Under Fire Over Failed Cryptocurrency Promotion
In a surprising turn of events, Argentine President Javier Milei has publicly recognized an error in judgment following the promotion of a cryptocurrency that rapidly gained popularity only to crash shortly thereafter. This incident has drawn significant criticism from economists, crypto experts, and opposition politicians, prompting an urgent investigation by Milei’s administration.
The Cryptocurrency Controversy
On Friday evening, Milei took to the social media platform X to promote a cryptocurrency named $LIBRA, which he claimed was part of a ‘private project’ designed to stimulate Argentina’s economy by financing small businesses and entrepreneurs. His message, which read, “The world wants to invest in Argentina. $LIBRA,” was accompanied by a link to the project’s website. However, within hours, the post was deleted, and Milei issued a statement claiming he was unaware of the project’s details before his endorsement. ‘I did not know the details of the project and after learning about it, I decided not to continue promoting it,’ he explained. He further stated that he had “obviously no connection” to the alleged company behind the cryptocurrency.
Rapid Surge and Fall of $LIBRA
In a troubling turn of events, $LIBRA’s value skyrocketed almost immediately following its announcement, reaching a market capitalization of approximately $4.6 billion within a few hours. However, this spike was short-lived, as large holders began liquidating millions of dollars worth of the cryptocurrency. According to the Kobeissi Letter, an analytical service focused on global capital markets, this led to a rapid decline in its value. ‘After the top was set at 5:40 PM ET, the coin fell in a literal straight-line,’ they reported.
Industry experts have labeled this situation as a potential “rug pull,” a term used to describe scams where developers of a cryptocurrency token vanish with investors’ money after artificially inflating its value. Many have raised alarms about the operation being a fraudulent scheme, with some estimates suggesting that the profits made could reach as high as $107 million.
Government Action and Responses
In light of the incident, Milei’s administration has decided to involve the Anti-Corruption Office (OA) to investigate any improper conduct among government officials, including the president himself. The presidency’s official statement emphasized that Milei ‘has not in any way participated in the development’ of the cryptocurrency and announced the establishment of a task force to expedite the investigation.
Javier Smaldone, a noted computer scientist and digital influencer famous for exposing pyramid schemes, labeled the incident as a ‘global scam.’ He indicated that the ramifications of the failed cryptocurrency project could extend beyond financial loss, potentially harming Argentina’s reputation in the international financial community.
Political Fallout
The fallout from the promotion of $LIBRA has ignited heated political discourse. Former president and current opposition figure Cristina Kirchner termed Milei a “crypto-scammer.” Meanwhile, Maximiliano Ferraro from the center-right Civic Coalition called for Parliament to create a ‘special inquiry commission’ to investigate the matter further.
On the other hand, Francisco Onato, identified in local media as Milei’s personal lawyer, defended the president’s actions, asserting that Milei merely highlighted a company aimed at boosting the economy and that his actions did not constitute a crime given the absence of malicious intent.
As this scandal unfolds, it underscores the complex and often volatile nature of the cryptocurrency landscape, particularly in a country like Argentina, which has seen increasing interest in digital assets amidst economic challenges. The outcome of the investigation may have lasting implications not only for Milei’s administration but also for the perception of cryptocurrencies in the country.
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