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What is Milei’s “Libragate” controversy?

X’s tweet by Argentine President Javier Miley led to a code controversy that threatened his political position. It all began when Milei approved Libra tokens in X and described it as a project focused on promoting economic growth by supporting small businesses and startups.

Given Milei’s 3.8 million followers and the credibility he has brought as president, the token’s value surged from zero to nearly $5, reaching a market capitalization of $4 billion for a short time.

However, this support was met with public backlash, leading Mairay to delete the post a few hours later. This led to massive sales, rapidly decreasing the value of Libra, and wiped away millions of investors’ funds. The sudden rise and fall of Libra has sparked concerns about potential manipulation and the risks of politicians affecting the unstable crypto market.

The Viva La Libertad project, associated with Libra Token, includes Milei’s popular catchphrase, La Libertad (meaning “Long Live Freedom” in Spanish) in its domain name. The purpose of the project was to channel funding to Argentinean investors and citizens in a decentralized way. Its token distribution allocated 50% tokens for Argentina’s growth, 30% liquidity and 20% at the Ministry of Finance.

The team behind the Libra token

Hayden Davis is Kelsier Ventures’ 28-year-old Crypto developer and CEO, and played a key role in launching the controversial Memecoin Libra. He said he was Mairay’s advisor, but the latter office denied such a relationship. Davis is also said to have played a role in launching Melania, Melania Trump’s memo coin.

However, the KIP protocol refused to be involved in the statement released via the X handle on February 24th. The company said that it was invited by Mauricio Novelli on February 13, 2025 to help raise funds for small and medium-sized Argentine businesses, but had nothing to do with the creation of the token.

Barstool Sports founder Dave Portnoy said he was approached by someone connected to the launch of Libra Memecoin and discussed potential promotional opportunities. A crypto company led by anonymous “Meow” was also involved in the launch.

Did you know? The Libra incident was compared to the launch of Trump Coin, which is linked to US President Donald Trump. The venture also has something to do with Memocoin and has declined sharply following a rapid price rise.

Accusations against President Mairay regarding Libra’s Memocoin fraud

Argentine President Javier Miley faces serious charges after receiving approval from the cryptocurrency Libra. Critics label the case as a potential ragpal scam, claiming that investors were seduced by Miley’s support for the token, investing in the token before it collapsed, leaving many people with unworthy coins.

Lawyer Jonathan Bardiviezo, along with Marcos Zelaya, is engineer Maria Eva Cootian tribal flame and economist Claudio Rozano, former head of the Argentina central bank, filed a lawsuit against President Miley, condemning the fraud.

Baldiviezo argued that his actions contributed to “illegal connections” with the promoter of Coin. Reflecting these concerns, the non-governmental organisation Observatorio del Derecho a la Ciudad filed a lawsuit accusing Milei of playing a key role in a scheme in which more than 40,000 investors allegedly lost more than $4 billion.

Even Davis, one of the developers of Libra, claimed that the sudden withdrawal of Milei’s support contributed to the crash of the token, hinting at betrayal by the presidential team.

Latin American leaders also expressed concern to Mexican President Claudia Sheinbaum, saying that “it is very serious when confirmed, especially with regard to the president’s authority to promote private matters.”

He is reportedly investigating in Spain about his involvement in the Libra cryptocurrency scandal. The accusations include fraud, market manipulation and insider trading after the value of Libra crashes, resulting in huge losses for investors.

How did Milei post his defense?

In response to the accusations, Mairay and his office firmly denied the misconduct. A statement from the Presidential Office emphasized that Milei was not involved in the development of Libra and that his social media posts only reflect his broader support for the entrepreneurial venture.

The statement noted that Milei regularly promotes business projects as part of his free market philosophy. The developer behind Libra, his KIP protocol approval, was part of a broader policy.

Anonymous government officials defended Mairay in communication with Reuters, claiming that if anyone had been fooled in this situation it would be the president himself. Officials emphasized that Milei often supports private initiatives and will continue to do so. In a social media post, Mairay dismissed the controversy as a politically motivated attack by opponents.

Despite these defenses, public skepticism about Mairay remains high. Critics argue that Mairay’s major social media impact should be held accountable, particularly with regard to financial support. The scandal sparked a broader debate about the ethical obligations of politicians in the unstable crypto space.

Did you know? In the face of criticism, Mairay responded by denouncement of his political opponent. He labelled it by accusing him of “the political caste of a dirty rat” for attempting to misuse the situation for his own malicious purposes.

Investigating scandals and possible impacts

The fallout from President Murray’s support of cryptocurrency Libra has sparked a formal investigation and is seeking his blast each. Federal judge Maria Servini is leading the investigation, looking into whether he is engaged in fraudulent activities related to the sudden rise in tokens and crash fall.

In particular, the project is under investigation by the US Department of Justice for potential fraud and market manipulation. The investigation, led by the fraud section, may expand to involve agencies such as the Federal Bureau of Investigation, the Securities and Exchange Commission, and the Department of Homeland Security.

Some opposition politicians are calling for a rambling trial, but such outcomes seem unlikely. However, this debate could undermine Mairei’s economic reliability, particularly as Argentina approaches its 2025 midterm elections.

In addition to justice, Milei’s administration has established its own research task unit (UTI), consisting of representatives from financial, legal and money laundering organizations. The Anti-Corruption Bureau is also being activated, investigating potential fraud by government officials, including the president. UTI will investigate the launch of Libra, focusing on the individuals and entities behind the project.

Did you know? This crypto scandal could damage Mairay’s public image he cultivated as a reform-oriented economist who promises to control the ramp-prolonged inflation and political corruption in Argentina.

Is Libra pulling the rug?

Libra’s controversy reflects classic lagpur. There, developers artificially inflate the value of the token, draining liquidity, leaving investors with a huge loss.

Lagpur is common in decentralized finance (DEFI) projects where liquidity pools play a key role. Scammers generally use social media, influencers and sometimes fake ads to create hype around tokens. When many investors buy a cryptocurrency and priced skyrocket, developers sell their shares, make big profits, and investors hold unworthy tokens.

Milei’s “Libragate” scandal is suspected to be a rug pull, but some famous rug pulls have occurred in cryptocurrency. Hawk Tuah (Hawk) for example made a headline after the rug pull incident. Launched on December 4th, 2024 by social media celebrity Haliey Welch, the value crashed from $500 million to $60 million within just 20 minutes. The incident sparked widespread backlash from both the online community and legal authorities.

Similarly, Froggy (Froggy) has become one of the most oversized rug pulls of 2024. Its playful branding and quick profit promises have attracted many investors. The developers have fostered excitement on platforms like X and Reddit and presented it as a community-driven project with strong support.

However, once they had enough money, they ran out of liquidity and ruined the value of the token. Froggy (Froggy) ultimately suffered a devastating 99.95% drop from its peak price of 0.00001577.