Argentina's Lawmakers Vote to Investigate Milei's Role in LIBRA Crypto Scandal

Lawmakers in Argentina’s Chamber of Deputies have voted to back an investigation into President Javier Milei’s alleged involvement in the Libra (LIBRA) cryptocurrency scandal. The vote, which took place on April 8, saw 128 deputies in favor, 93 against, and seven abstentions. This move comes after a previous attempt to advance the investigation in the Senate failed.

The scandal unfolded after Milei promoted the LIBRA memecoin on social media, leveraging his position as president and his substantial following to boost the token's value. The token quickly reached $5, briefly touching a market cap of $4 billion. However, the promotion led to accusations of wrongdoing, with critics claiming that LIBRA was a rug-pull scam designed to lure investors in.

Lawyer Jonatan Baldiviezo, alongside Marcos Zelaya, engineer María Eva Koutsovitis, and economist Claudio Lozano, a former head of Argentina’s central bank, filed a lawsuit against Milei, accusing him of fraud. The non-governmental organization Observatorio del Derecho a la Ciudad also filed a case, accusing the president of promoting a scheme that reportedly resulted in over 40,000 investors losing more than $4 billion.

Despite numerous sources showing his social media posts, Milei denied claims that he promoted LIBRA, stating, “I did not promote that. What I did, I spread the word.” However, reports surfaced that one of the creators behind the controversial Libra crypto token sent a text message bragging about being able to pay Milei’s sister in exchange for the president sharing the memecoin’s details on social media.

On April 9, Argentina's House of Representatives voted to establish a special committee to investigate the LIBRA memecoin scandal. The scandal erupted on February 14 when Milei promoted the LIBRA token on social media, describing it as a means to "boost the Argentine economy." The token's value surged by over 3,000% within hours of the promotion but crashed by 90% shortly after Milei deleted the post and claimed he was unaware of the token's details. The government later downplayed the promotion, attributing it to routine support for entrepreneurship.

The investigation was approved following a special session held on April 8, where lawmakers backed three resolutions aimed at uncovering the truth behind the controversial token’s launch and rapid crash. The first resolution establishes an investigative commission to probe the LIBRA scandal. Lawmakers also voted to summon top government officials, including chief of staff Guillermo Francos, economy minister Luis Caputo, justice minister Mariano Cúneo Libarona, and National Securities Commission head Roberto Silva, for questioning. A third resolution requests detailed reports from the executive branch about LIBRA’s development and the government’s role in its promotion. All three measures passed with strong support despite resistance from some members of the ruling La Libertad Avanza party.

The opposition called for transparency and accountability, with lawmaker Maximiliano Ferraro from the Civic Coalition stating, “Society has the right to know the truth.” Others warned of executive overreach and urged respect for judicial processes. The scandal has led to a political backlash, with lawmakers across opposition blocs arguing that President Milei’s handling of the situation undermines his anti-corruption stance. This could hurt his credibility ahead of Argentina’s midterm elections later this year.

Investigations later revealed that insiders, including Kelsier Ventures, might have accessed tokens and manipulated liquidity before launch, making over $110 million in profits. A series of lawsuits have been filed against key figures in the token’s creation. In one of them, on March 18, a class-action lawsuit was filed in New York against Kelsier Ventures, KIP Protocol, and Meteora, alleging deceptive practices, liquidity manipulation, and fraud. Court documents state that developers withheld 85% of the token supply, enabling insiders to drain liquidity at launch while retail investors were misled with promises of economic revival.

The LIBRA scandal has raised significant concerns about the role of government officials in promoting cryptocurrencies and the potential for insider manipulation. The investigation aims to uncover the truth behind the token’s launch and crash, as well as the government’s involvement. The political fallout from the scandal could have far-reaching implications for President Milei’s administration and his anti-corruption stance. The outcome of the investigation will be closely watched by both domestic and international observers, as it could set a precedent for future cryptocurrency regulations and government oversight.