Argentine President Javier Milei is under legal scrutiny after promoting a cryptocurrency that suffered a rapid collapse, triggering financial losses for thousands of investors. A federal judge has been assigned to investigate Milei's involvement in the incident, amid mounting political pressure and opposition calls for impeachment.
The controversy began Friday when Milei posted on X, formerly Twitter, about a newly launched digital token, $Libra, linking to a website selling the cryptocurrency. Shortly after his endorsement, the token's value surged before crashing, leading investors to accuse Milei of promoting a fraudulent scheme. The scandal has shaken Argentina's financial markets, with the country's benchmark S&P Merval index dropping 5.6% on Monday.
Milei has denied any wrongdoing, arguing that his post did not constitute an official endorsement. "I didn't promote it, I merely shared it," he told Argentine TV channel Todo Noticias in a Monday interview. He further dismissed investors' complaints, likening their losses to gambling. "If you go to a casino and lose money, what's there to complain about when you knew the risks?" he said.
The president's office maintains that Milei had no financial interest in $Libra and that he deleted the post after learning more details about the cryptocurrency. However, his critics argue that the situation bears the hallmarks of a "rug pull" scam-a fraudulent scheme in which promoters artificially inflate a cryptocurrency's value before withdrawing their funds and leaving investors with worthless assets.
More than 100 formal complaints have been filed with Argentine authorities, while some investors have taken legal action in U.S. courts. The non-governmental organization Observatorio del Derecho a la Ciudad has accused Milei and other government officials of fraud, illicit association, and dereliction of duty. "We denounce Milei as being part of an illicit association that organized a scam with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with a loss of more than $4 billion," the organization stated on its website.
Despite the growing legal pressure, some government officials insist that Milei himself is a victim. "The only one on the face of this earth who was cheated is Milei," a government source told Reuters, speaking on condition of anonymity. The official suggested that Milei frequently promotes private initiatives and had no direct involvement in the token's creation.
The cryptocurrency was launched on Meteora, the same exchange that introduced the $Trump meme coin in January, which also saw rapid volatility, wiping out the savings of thousands of investors. Meteora co-founder Ben Chow denied that his firm played any role in launching $Libra, stating on X that his company "never had any access to the tokens or to Milei." He later clarified that the firm only provided IT support to verify the token's authenticity after its public release.
Milei's handling of the scandal has further polarized Argentina's political landscape. Opposition lawmakers have suggested that impeachment proceedings could be initiated, though analysts believe they lack the votes needed to move forward. Still, the investigation into Milei's role in the crypto controversy threatens to derail his administration's agenda ahead of critical midterm elections.
Milei, a self-described libertarian economist, has focused his presidency on sweeping deregulation and spending cuts, aiming to reduce Argentina's spiraling inflation. His administration has championed free-market policies and criticized government intervention in financial markets. However, the crypto scandal could undermine his credibility as he faces accusations of recklessness in promoting a speculative investment without conducting proper due diligence.
Investors and citizens have voiced mixed reactions, with some accusing Milei of misleading the public while others defend him as a target of political attacks. In response, Milei took to X again on Friday, writing, "This increases our conviction to kick them in the ass," referring to his political opponents.
