Political crypto scam: what does President Milei and the LIBRA token have to do with it?

What’s new? Argentine President Javier Milei has been charged with fraud for promoting the fake LIBRA token. Local lawyers filed a lawsuit against the libertarian leader in criminal court. The plaintiffs claimed that the president’s actions were fraudulent and that he violated the Public Ethics Law.

On February 14, 2025, Milei began promoting a little-known cryptocurrency in his X account, which quickly grew to a market capitalization of about $4,5 billion. At the time, the president noted that LIBRA was aimed at “encouraging economic growth by funding small businesses and startups.”

However, the post was deleted within hours, causing the value of the token to plummet, as in the classic case of a rug pull scheme. According to Dexscreener, the drop resulted in millions of dollars in losses for its short-term investors.

How did it all start? Julian Peh, the founder of Kip Protocol and creator of the LIBRA token, started his career in the crypto world in 2016 by investing in BTC and ETH. He achieved success in the NFT market in 2021, but his real fame came in 2024 after meeting with the Argentine president at a technology forum in Buenos Aires. At this event, the entrepreneur discussed the topics of artificial intelligence, small businesses, and the economic future with Milei, which made a significant impression on the president.

A few months later, Peh’s company was included in the official blockchain committee of Buenos Aires, and he himself became not just a founder of the startup, but an advisor to the government. A short time later, Peh presented an “investment program” and asked Milei for support. He also brought in market makers to create interest.

The plan was to issue a national token to support small businesses amid Argentina’s economic recovery, and the president liked the idea. The launch took place with a tweet from the president, “The world wants to invest in Argentina.” Within an hour, millions came into the market, and capitalization immediately exceeded $4 billion.

However, problems soon arose: the token was unlocked, and 82% ended up in the same cluster. Insiders started selling out. With his move, Peh secured the withdrawal of $87 million and mysteriously disappeared. The Argentine president began receiving requests for clarification, after which he deleted the tweet, after which the token’s value dropped 20 times. Milei though pledged support for the project, suddenly changed his mind, replying as follows:

“I was not aware of the details of the project and after having become aware of it I decided not to continue spreading it.”

In the wake of the token scandal, the team associated with Kip Protocol emphasized that their connection to the product was only indirect. They noted that Kelsier Ventures, led by entrepreneur Hayden Davis, was fully responsible for the project.

What happens next ? Argentina’s opposition is serious and threatens the president with impeachment for promoting the scam project. On February 16, 2025, President Milei instructed the Anti-Corruption Office to initiate an investigation. An official statement from the President’s Office said that all persons involved in the launch of LIBRA, including government members, will be investigated. All data collected will be forwarded to the judiciary.