Argentine president rejects all allegations of supporting the LIBRA token: investigation continues

What’s new? Argentine President Javier Milei spoke out for the first time about the cryptocurrency scandal that has damaged his reputation at home and abroad, prompting lawsuits and even calls for his impeachment.

Material by Bloomberg

He acknowledged that he had met with the creators of the Libra meme coin but insisted that his social media post was not intended to convince people to invest. Instead, he claimed he was simply sharing information about an initiative to support Argentine entrepreneurs with cryptocurrency:

“I’m not an expert. My specialty is economic growth, with and without money. As a guy who’s a super technology enthusiast seeing the possibility of a tool to finance entrepreneurs’ projects, I spread the word.”

Milei is charged with fraud for promoting a fake cryptocurrency. On February 16, local lawyers filed criminal charges against him. His political opponents have also capitalized on the scandal. The left-wing Peronist opposition accused him of involvement in crypto fraud and pushed for his impeachment over alleged ethics violations.

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What else is known? The scandal erupted after the president of Argentina published a post supporting Libra on X. For a short time, this raised the token’s market capitalization to $4,5 billion. However, hours later, Milei deleted his post, causing Libra’s price to collapse in what critics called a classic rug pull scheme. Investors who bought at the peak lost millions.

While Argentines demanded answers, the presidential palace initially remained silent. Economy Minister Luis Caputo was the first cabinet member to speak publicly, saying the incident was an unforced error in a highly specialized topic and that the president had no ill intentions and committed no crime:

“Cryptocurrencies are a tiny, infinitesimal world. It’s a world of specialists that’s very hard to understand. I don’t understand crypto either, and it’s been explained to me 800 000 times.”

What were the consequences? The economy minister tried to assure the public that the incident would have no repercussions on the markets and said that no foreign investors had written to him to inquire about the issue. US bond and stock markets were closed on February 17, yet investors in Buenos Aires dumped shares in some of the country’s largest local companies. The benchmark S&P Merval index posted its biggest one-day drop since July, falling about 5,6% on Monday.

While the political and market implications remain unclear, the episode was a humbling one for the libertarian, who has so far enjoyed popular support. His major victory was to bring inflation down to its lowest level in five years last month.

Some of the president’s allies told local media that he was duped by those who launched the coin and said he was not privy to the details. Meanwhile, Hayden Davis, CEO of Kelsier Ventures, which helped launch the coin, said he was still waiting for an explanation from the government.