TLDR
- Argentine President Milei promoted LIBRA token on X, claiming it would help the economy, leading to a 3,223% price surge before he deleted the post 5 hours later, causing a 90% crash
- Lawyers filed fraud charges against Milei, arguing his involvement was crucial to what they describe as a “rug pull” scam
- Blockchain analysts identified suspicious wallet activity, with the alleged creator cashing out $87 million and an unknown insider receiving $5 million in USDC
- Project developer Hayden Davis blamed Milei’s team for withdrawing support despite prior commitments
- The token lost over 96% of its value from its peak, wiping out $4.4 billion in market value
A cryptocurrency promotion by Argentine President Javier Milei has resulted in fraud charges after the token he endorsed lost 96% of its value within hours. The incident, which occurred on February 14, 2025, has drawn criticism from political opponents and led to formal legal action.
President Milei used his X account to promote the LIBRA token, describing it as a private project that would “incentivize the growth of the Argentine economy” by funding small businesses. The post included a link to the Viva La Libertad Project website.
The market responded quickly to the presidential endorsement. Within minutes of the announcement, the token’s value increased by 3,223%, reaching a market cap of over $4 billion. However, the surge proved short-lived.
Five hours after the initial post, Milei deleted his endorsement. In a follow-up message, he stated that he “had not been aware of the project’s details” before sharing it with his 3.8 million followers. The token’s value plummeted by 90% following the deletion.
The project’s developer, Hayden Davis of KIP Protocol, expressed frustration in a video posted on X. Davis claimed that Milei and his team had made prior commitments but “unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media.”
Trading Patterns
Blockchain analysts have identified several concerning patterns in the token’s trading activity. According to Lookonchain, an unknown insider received compensation of $5 million in USD Coin (USDC). Speculation has linked this wallet to Dave Portnoy, who allegedly received LIBRA tokens for promotion.
Someone knew in advance that $LIBRA was going to be launched but bought too late, losing 26,577 $SOL($5.34M).
However, this guy appears to have been compensated with 5M $USDC.
1/ Let’s dive into the story on-chain. pic.twitter.com/KiHhQaQn2z
— Lookonchain (@lookonchain) February 17, 2025
Further investigation by Bubblemaps revealed that 82% of the LIBRA token supply was controlled by a single cluster of wallets. The analysis firm also connected the creator’s wallet to previous tokens like TRUST, KACY, VIBES, and HOOD, which they believe were pump-and-dump schemes.
The creator’s wallet reportedly cashed out $87 million after the launch using side addresses funded through a cross-chain protocol. In total, Bubblemaps estimates the creator has earned over $100 million from these projects.
$LIBRA TEAM IS CASHING OUT
They already made $87M by removing USDC and SOL from liquidity pools https://t.co/hRGnRPTDiE pic.twitter.com/aiDmODKi6o
— Bubblemaps (@bubblemaps) February 15, 2025
On February 17, a group of lawyers filed formal fraud charges against President Milei. Attorney Jonatan Baldiviezo argued that the president’s actions resembled a “rug pull” scam, where developers attract investors before abandoning a project.
The legal complaint describes the operation as an “illicit association” involving “an indeterminate number of frauds.” The lawyers maintain that Milei’s involvement was essential to the alleged scheme.
Political opposition has mounted, with former President Cristina Fernández de Kirchner accusing Milei of deception. Some lawmakers are pushing for a congressional investigation and considering impeachment proceedings.
Milei’s administration has attempted to downplay the incident, describing the promotion as routine support for entrepreneurs. The president has announced an investigation into whether anyone in his government acted improperly.
The Anti-Corruption Office is now reviewing the case. A judge is expected to examine the evidence this week to determine whether to pursue the charges or refer them to a prosecutor.
Despite losing over $5.3 million in crypto, one trader had anticipated LIBRA’s launch but bought in too late. Similar patterns of value loss have been observed in other meme coins, including the Official Melania Meme coin, which has dropped 84% since its launch.
The incident draws parallels to US President Donald Trump’s surprise meme coin launch in December 2024, highlighting the growing intersection of political figures and cryptocurrency promotions.
As of February 17, 2025, the LIBRA token remains down 96% from its peak price, representing a loss of $4.4 billion in market value.
