Recently, Argentine President Javier Milei was involved in a controversy related to the promotion of the $LIBRA cryptocurrency, which resulted in significant losses for investors and generated criticism from both the political opposition and financial experts.
Promotion and Collapse of $LIBRA :
On Friday, February 14, 2025, Milei used her account on X (formerly known as Twitter) to promote $LIBRA, a cryptocurrency aimed at financing small businesses and Argentine startups. The post stated that the project would encourage the country's economic growth. After the promotion, the value of $LIBRA shot from US$0.45 to almost US$5.20. However, just hours later, the price plummeted to less than $1, leading to significant losses for investors.
Reactions and Investigations :
In light of the collapse of cryptocurrency, suspicions arose that $LIBRA was a "rug pull" scheme, where developers artificially increase the value of an asset and then sell their holdings, leaving investors with losses. Experts pointed out that almost 80% of $LIBRA was concentrated in a few digital wallets before Milei's promotion.
In response to the criticism, Milei deleted the post and stated that she was not aware of the details of the project.
Political and Economic Implications :
The controversy surrounding $LIBRA generated an intense political debate in Argentina. The opposition accused Milei of involvement in a fraudulent scheme and threatened to initiate impeachment proceedings. Furthermore, the episode raised questions about the regulation and supervision of the cryptocurrency market in the country, highlighting the need for stricter measures to protect investors and the integrity of the financial system.
This incident highlights the risks associated with investing in cryptocurrencies, especially those promoted without proper transparency and regulation. The lack of clear information and the concentration of assets in few hands can lead to market manipulations and losses for unsuspecting investors.
