Argentina's LIBRA Scandal Unveils Crypto-Political Ties in Global Freeze

Argentina's federal court has imposed an indefinite asset freeze on individuals linked to the LIBRA memecoin scandal, a case now entangled with political intrigue after connections to President Javier Milei emerged. The move, ordered by Judge Marcelo Martínez de Giorgi, targets U.S. entrepreneur Hayden Davis, the project's founder, along with Colombian Favio Camilo Rodríguez Blanco and Argentine Orlando Rodolfo Mellino. Prosecutors allege the trio orchestrated a $100 million to $120 million pump-and-dump scheme, with Davis allegedly leveraging Milei's endorsement to inflate the token's value, as reported by Yahoo Finance.

The court's "prohibición de innovación" measure bars the sale or transfer of assets, including crypto holdings, to preserve evidence while investigations proceed, according to CryptoTimes. Federal prosecutor Eduardo Taiano, who requested the freeze, cited risks of asset concealment and emphasized the need to trace funds linked to suspicious transactions. Among these is a $507,500 transfer Davis made via Bitget just 42 minutes after posting a selfie with Milei on January 30, promoting Davis as a blockchain and AI advisor, according to Coinpedia.

On-chain analysis by TRM Labs and Chainalysis revealed $90 million in movements tied to LIBRA's collapse, with funds funneled through exchanges like Bitget and Gate.io, as reported by CryptoTimes.

The case has drawn scrutiny for its political implications. Prosecutors allege intermediaries such as Rodríguez Blanco and Mellino converted crypto into fiat to obscure payments potentially tied to Milei's inner circle. Texts reportedly show Davis claiming influence over the president, stating, "I send money to his sister and he signs what I say," as reported by CryptoTimes. While Argentina's anti-corruption agency previously cleared Milei of ethics violations, public trust in the leader has waned, with approval ratings dropping to 41.6% in March 2025, as reported by CryptoNews.

The scandal has also spilled into international markets. A U.S. class-action lawsuit accuses Davis and Meteora Trading of running a "fraud factory" under the RICO Act, alleging coordinated global schemes to defraud investors, as reported by CryptoTimes. Meanwhile, Argentina's National Securities Commission (CNV) has mandated crypto platforms to comply with the asset freeze, extending oversight to all virtual asset service providers, as reported by Yahoo Finance.

The LIBRA probe underscores growing global regulatory scrutiny of crypto's intersection with politics. Brazil, for instance, recently announced stricter crypto oversight, requiring digital asset firms to seek Central Bank authorization by 2026, as reported by TradingView. In the U.S., bipartisan Senate proposals aim to shift crypto regulation from the SEC to the CFTC, emphasizing commodity frameworks, as reported by Coinotag.

As Argentina's investigation unfolds, the case could set a precedent for how nations address crypto-linked political influence. For now, the freeze on Davis' assets-and the shadow of potential penalties-signals a pivotal moment in the country's battle to untangle financial misconduct from high-profile digital asset promotions, as reported by Yahoo Finance.