Argentine prosecutors investigate Milei over $LIBRA crypto endorsement

Federal prosecutors in Argentina have launched an investigation into President Javier Milei’s involvement in promoting a cryptocurrency that subsequently crashed, causing billions in losses for investors, according to local media reports Monday.

The investigation centers on Milei’s social media endorsement of $LIBRA cryptocurrency last Friday, which prosecutors will examine for potential fraud, criminal association, or breach of presidential duties.

The digital currency’s value skyrocketed following Milei’s promotion before dramatically collapsing, prompting the president to delete his endorsement and acknowledge his mistake.

The incident has sparked multiple legal complaints, including one from the Rights NGO Observatory for the Right to the City, which alleges Milei participated in a “criminal organization” whose scheme affected more than 40,000 people and resulted in losses exceeding $4 billion.

$LIBRA condemned as a ‘rug pull’ crypto scheme

Cryptocurrency market analysts characterized the incident as a likely “rug pull” – a scheme where developers launch a token, attract investors, and quickly cash out.

The Kobeissi Letter, a global markets analysis publication, reported that “multiple large holders began liquidating MILLIONS of USD worth of $LIBRA” minutes after its launch, with some participants gaining over $4 million as the currency briefly reached a market capitalization of $4.6 billion.

The fallout has triggered political turmoil in Argentina, with former president Cristina Kirchner labeling Milei a “crypto-scammer” and opposition lawmakers initiating impeachment proceedings. The controversy also appeared to rattle financial markets, with the Buenos Aires Stock Exchange opening nearly four percent lower on Monday.

In response to the growing crisis, Milei claimed ignorance of the project’s details and denied any connection to the “alleged private company.” His administration announced that Argentina’s Anti-Corruption Office would investigate potential improper conduct and establish a task force to examine the cryptocurrency’s launch.

The prosecutor’s office has expanded its investigation to include Julian Peh, CEO of companies involved in creating $LIBRA, and Chamber of Deputies president Martin Menem, who had shared Milei’s initial endorsement.