In the context of an increasingly volatile cryptocurrency market, the scandal involving the $LIBRA coin has made waves as Argentina's President, Javier Milei, is accused of criminal fraud. According to lawyers Jonatan Baldiviezo, Marcos Zelaya, María Eva Koutsovitis, and Claudio Lozano, Milei's actions are believed to have played a central role in the 'rug pull' – a classic fraud scenario causing millions of investors to suffer heavy losses.
The Launch Process and the Sudden Collapse
Last Friday, Javier Milei posted an article on X (formerly Twitter) to promote the $LIBRA coin, attracting significant interest from the investment community. Just hours later, his post was deleted, leading to a sell-off storm on exchanges and causing the value of $LIBRA to plummet. Investors, monitoring the market through Dexscreener, witnessed their capital being 'exposed' and rapidly dissipating.
Allegations and Legal Reactions
Lawyers assert that Milei's actions violated Argentina's Public Ethics Law. "In this illegal connection, fraud has been committed, in which the president's actions played a crucial role," said Jonatan Baldiviezo to The Associated Press. According to the indictment, Milei exploited his political position and reputation to inflate asset values, only to withdraw suddenly, causing investors to suffer significant losses.
However, the President's Office quickly issued a statement denying any wrongdoing. According to the announcement, Milei was not directly involved in the creation of the $LIBRA coin; his post was only intended to support startup projects, and the tweet deletion was carried out to prevent excessive speculation.
Response from Javier Milei and Stakeholders
On platform X, Javier Milei stated: "I do not know the details of this project, and after being informed, I decided not to continue promoting it (that's why I deleted the tweet)."
He also accused political opponents of exploiting the scandal to diminish his credibility.
In addition, documents and online records show that before the launch of $LIBRA, Javier Milei and some members of the government had meetings with representatives of KIP Protocol – the team behind the project. This raises further questions about his level of involvement in the event.
Currently, the Anti-Corruption Office, a unit of the Executive Branch, has opened an internal investigation and is committed to transferring all collected information to the judicial system to verify whether any individuals or organizations related to the KIP Protocol project have violated the law.
Response from KIP Protocol and Jupiter Exchange
In a recently released video, KIP Protocol's CEO – Hayden Davis strongly criticized Milei, asserting: "Despite initial commitments, Milei and his team suddenly changed their stance, withdrew, and deleted all prior posts on social media."
According to Davis, Milei's sudden decision shattered investors' trust, contributing to the collapse of $LIBRA.
Moreover, the cryptocurrency exchange Jupiter Exchange also confirmed that some of their team members were aware of the $LIBRA launch – information communicated from Kelsier Ventures about two weeks ago. Although the coin reached a valuation of $1.5 billion before receiving the 'Verified' symbol on the platform, Jupiter Exchange asserted that they take all allegations of insider trading seriously. They also mentioned that dozens of counterfeit token versions appeared immediately after the launch of $LIBRA, causing confusion for traders.
The Reserve Fund Situation and Future Prospects
Despite the collapse of the value of $LIBRA, CEO Hayden Davis still controls $100 million from the project's reserve fund. He stated he would proceed with reinvestment and burn all repurchased tokens to restore trust and ensure transparency.
"Unless there is a viable alternative, I intend to implement this plan within the next 48 hours," Davis asserted, while denying any allegations related to fraud, placing full blame on Milei's sudden decision.
Consequences and Lessons for the Market
While legal investigations continue, investors are facing losses of millions of dollars, causing both the cryptocurrency market and the Argentine political sphere to face waves of criticism. The $LIBRA scandal not only marks one of the largest frauds in this field but also raises serious questions about the responsibility and transparency of leaders when intervening in financial markets.
This incident promises to be a significant lesson, emphasizing the importance of protecting investors against actions that exploit political motives and highlighting the need for a transparent and fair market management system in the digital age.