- Argentine President Javier Milei faces criminal charges over promotion of LIBRA cryptocurrency that reached $4 billion market cap before crashing.
- The token lost 96% of its value hours after launch, with developers allegedly extracting $87 million in USDC and SOL.
- Crypto analytics firms identified red flags, including 82% token concentration in single wallet cluster.
- Milei deleted his promotional post and claimed no connection to the project after the crash.
- Legal action initiated by former Central Bank head and other opponents awaits court assignment.
Argentina‘s cryptocurrency market faces renewed scrutiny after President Javier Milei became embroiled in a fraud investigation over his promotion of the LIBRA cryptocurrency, which experienced a dramatic rise and fall within hours of its Friday launch, resulting in significant investor losses.
The criminal complaint, filed by former Argentine Central Bank chief Claudio Lozano and other opponents, alleges that Kelsier Ventures and its CEO Hayden Davis orchestrated a sophisticated fraud scheme with Milei’s involvement.
Blockchain analytics firm Bubblemaps revealed concerning centralization issues, with 82% of LIBRA tokens concentrated in a single wallet cluster, suggesting potential market manipulation. Chainalysis corroborated these findings, highlighting multiple project red flags.
The incident mirrors recent cryptocurrency controversies involving political figures, notably former U.S. President Donald Trump‘s December 2023 meme coin association, highlighting the growing intersection of political influence and cryptocurrency markets.
According to on-chain data, project developers allegedly withdrew approximately $87 million in USDC and SOL from liquidity pools before the token’s collapse. The rapid extraction of funds occurred as investors rushed to sell their positions, sending the token price plummeting.
Milei’s subsequent statement attempted to distance himself from the project: “I wasn’t informed of the project’s details, and after learning about them I decided not to continue promoting it.” However, attorney Jonatan Baldiviezo argues that the president’s initial promotion was “essential” to the alleged fraud.
The case highlights the growing concern over cryptocurrency promotions by political figures and their potential impact on market dynamics. Argentine authorities are expected to assign a judge or refer the case to a prosecutor on Monday, potentially setting a precedent for political accountability in cryptocurrency promotions.
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