Milei's $LIBRA Promotion Allegedly Enabled $100M Crypto Collapse, Probe Recommended

Argentine President Javier Milei faces mounting scrutiny as a congressional commission concludes his promotion of the collapsed $LIBRA cryptocurrency constituted misconduct in office, recommending a formal investigation into his actions. The 200-page report, released by the Chamber of Deputies' investigative committee, alleges that Milei used his presidential authority to amplify the token's visibility, contributing to a $100 million+ loss for investors. The findings challenge earlier claims by Milei and his administration that his involvement was limited to sharing information as a "techno-optimist" aiming to boost Argentina's tech sector.

The report underscores that Milei's February 2025 endorsement of $LIBRA-via a now-deleted social media post-catalyzed a surge in trading volume before the token's abrupt collapse, which industry analysts labeled a "rug pull." Investigators argue the president's actions provided "indispensable cooperation" for the scheme, as his promotion enabled the project to attract liquidity it otherwise would not have achieved. The collapse left over 114,000 wallets with losses, including 498 investors who each lost more than $100,000 according to reports.

The probe also revealed a pattern of behavior, linking $LIBRA to earlier crypto projects like the KIP Protocol, which Milei similarly promoted in December 2024. On-chain data cited in the report shows that liquidity pools for both tokens were drained shortly after presidential validation, suggesting a deliberate strategy to bypass regulatory oversight. The commission criticized Milei for holding 16 private meetings with $LIBRA's creators, including U.S. entrepreneur Hayden Davis and Argentine figures Mauricio Novelli and Manuel Terrones Godoy, all facilitated by Milei's sister, Karina Milei, who serves as presidential chief of staff.

Legal and political ramifications are intensifying. Federal Judge Marcelo Martínez de Giorgi has frozen assets of key $LIBRA organizers, including Davis, while criminal investigations into money-laundering and fraud continue. The congressional report has been forwarded to prosecutors, though legislative action remains uncertain. With a new Congress dominated by Milei allies set to convene in December, observers anticipate limited follow-through on the findings.

The scandal has compounded challenges for Milei's administration, which already faces allegations of corruption tied to the National Disability Agency (ANDIS), where his sister is accused of receiving kickbacks from pharmaceutical contracts according to testimony. Meanwhile, Argentina's crypto market remains in flux. Despite the $LIBRA debacle, the country has seen a surge in emerging-market debt issuance, with the City of Buenos Aires recently raising $600 million in international bonds- the first such sale since 2016. Analysts note that while the political turmoil could deter short-term investment, Argentina's broader economic reforms may yet attract capital.

As the $LIBRA case unfolds, the report's emphasis on systemic evasion of institutional controls raises broader questions about crypto regulation in Argentina. The findings could influence upcoming legislative debates on digital assets, particularly as major banks prepare to re-enter the crypto sector. For now, the focus remains on whether Milei's conduct will lead to criminal charges or political consequences-a scenario complicated by his growing influence in a shifting political landscape.