Argentine lawyers have filed a fraud lawsuit against President Javier Milei following a cryptocurrency collapse linked to his social media endorsement of $LIBRA. The coin’s value plummeted shortly after its promotion, resulting in significant investor losses. Experts have labeled the incident a “rug pull,” with allegations that Milei’s actions contributed to an illegal scheme. Amid backlash from opposition figures, Milei’s office has initiated an investigation, while the cryptocurrency fraud crisis continues to escalate globally.
Legal Action Against Argentine President Over Cryptocurrency Collapse
In a dramatic turn of events, Argentine lawyers have initiated a fraud lawsuit against President Javier Milei in a criminal court. The accusations stem from Milei’s promotion of a cryptocurrency on social media, which saw its value plummet within hours. According to lawyer Jonatan Baldiviezo, the president’s actions were crucial in what they describe as an illegal association leading to fraud.
A judge is anticipated to be assigned to the case shortly, with proceedings set to be handed over to a prosecutor for in-depth investigation. In response to the allegations, a spokesperson for President Milei attributed the situation to discrepancies that arose during the COVID-19 pandemic.
The Rise and Fall of $LIBRA
On Friday, President Milei took to X to endorse a cryptocurrency called $LIBRA, claiming it aimed to “promote economic growth by financing small businesses and startups.” However, the post was deleted just hours later, resulting in a significant collapse of the coin’s value. Financial data indicates that investors incurred millions in losses as a result.
Expert Javier Smaldone characterized the situation as a “rug pull,” a common Ponzi scheme tactic in the cryptocurrency arena. This strategy involves drawing in numerous investors with a new cryptocurrency, only for major stakeholders to sell off their shares once the value has surged, causing the currency to crash. Smaldone noted that this entire process transpired within two hours for $LIBRA, generating a staggering profit of approximately 107 million dollars.
After removing his promotional post, Milei claimed ignorance regarding the currency’s fluctuations and accused political rivals of manipulating the circumstances. His office declared that the nation’s anti-corruption office would take immediate action, affirming that Milei and his administration had recently conferred with Kip Protocol, the coin’s developers. A statement confirmed that all findings from the investigation would be forwarded to the judiciary.
Hayden Mark Davis, a representative from Kip Protocol, publicly criticized the president in a video, attributing the cryptocurrency’s downfall directly to him. Following the incident, the Argentine presidential office announced that President Milei had engaged the anti-corruption agency to probe whether any government members, including himself, acted inappropriately regarding $LIBRA’s promotion.
Milei has faced backlash from opposition figures, with former president Cristina Kirchner labeling him a “crypto fraudster” on social media. Senator Martín Lousteau from the UCR party also highlighted that this was the second instance where Milei promoted a cryptocurrency that ultimately turned out to be fraudulent.
The global impact of cryptocurrency fraud is severe, with estimated damages reaching a staggering 70 billion euros. High-profile figures, including celebrities like Cardi B and tech moguls like Elon Musk, have also launched their own coins, with Donald Trump’s digital commemorative coin recently gaining attention. Such incidents of fraud within the crypto sphere, particularly those involving hype on social media followed by dramatic crashes, have become a growing concern due to the lesser regulation compared to conventional securities trading.