Milei Drops LIBRA Meme Token After 89% Plunge

Argentina's President Javier Milei has distanced himself from the LIBRA meme token, following a dramatic 89% plunge in its value. The token's price collapse has raised concerns about its legitimacy and prompted Milei to withdraw his support.

Milei initially promoted LIBRA on his X account, linking it to the Viva La Libertad Project, which claimed to support Argentina's economy by funding small businesses. However, after learning more details, he took down his tweets and clarified that he had not conducted proper due diligence before endorsing the project.

LIBRA's price surged after Milei's initial endorsement, with its market capitalization reaching $4.5 billion. However, as doubts about the project's legitimacy spread, the token's price collapsed from $4.50 to $0.50. Trading volume reached $1.1 billion in just a few hours before the sell-off intensified.

On-chain analysts flagged several red flags, including centralized control of the token supply and suspicious fund movements. Digging through blockchain data revealed that 82% of LIBRA's total supply was held in just a few wallets, raising concerns about centralized control. Additionally, on-chain analytics firm Bubblemaps reported that the project's developers had withdrawn $87 million from liquidity pools, speeding up the token's downward spiral.

This LIBRA situation is not the first time Milei has faced criticism for promoting crypto. In 2021, he endorsed CoinX, which turned out to be an alleged Ponzi scheme. Investors later sued Milei for losses between 30 and 40 million Pesos ($300,000) after regulators shut down CoinX.

The LIBRA incident mirrors the launch of $TRUMP, a meme coin linked to the U.S. President Donald Trump in January. While $TRUMP turned out to be legitimate, LIBRA did not. Both tokens caused a surge in trading activity followed by uncertainty over their authenticity.