Argentina is embroiled in the ‘Cryptogate’ scandal, involving President Javier Milei, who faces over a hundred complaints regarding the promotion of a cryptocurrency, $LIBRA, that crashed soon after its launch. Despite claiming good faith and minimal involvement, Milei’s actions have led to estimated losses of up to $250 million. Legal investigations are underway, with potential political repercussions, including calls for impeachment from the opposition. The controversy has also impacted market stability and raised concerns about Milei’s leadership.
Unraveling the ‘Cryptogate’ Scandal Involving Argentine President Javier Milei
The political landscape in Argentina has been rocked by a scandal dubbed ‘Cryptogate’ since February 15, which involves over a hundred complaints and a president accused of negligence. At the center of the controversy is President Javier Milei, who claims he acted in ‘good faith’ when he shared a post promoting a cryptocurrency that ultimately crashed, leading to significant financial losses. Here’s what we currently know about the developments, key players, and the ramifications of what many in the opposition label as a fraud.
The Cryptocurrency Launch
On a Friday evening, shortly after 7 PM, Javier Milei, who boasts 3.8 million followers on X, announced the launch of a cryptocurrency called $LIBRA, aimed at ‘boosting the Argentine economy’by providing funding for small and medium-sized enterprises (SMEs). However, just four hours later, the ultraliberal president retracted his initial message, stating that after learning more about the $LIBRA project, he would ‘discontinue any promotion’of it.
During this brief window, the cryptocurrency skyrocketed from mere cents to nearly $5 before plummeting again. According to experts, including prominent computer scientist and influencer Javier Smaldone, the transaction volume exceeded ‘$4.5 billion’within hours. Losses are estimated to be between $100 million and $250 million, with substantial profits secured by a select group of early investors.
Key Figures Involved
Leading the project is Hayden Davis, an American entrepreneur at the helm of Kelsier Ventures, who identifies himself as an ‘investor and consultant’in blockchain, cryptocurrency, and artificial intelligence. Javier Milei describes their meeting in January as a ‘very interesting conversation’ regarding the implications and uses of these technologies. In a statement, Davis claimed he ‘did not receive’any of the funds generated by $LIBRA, asserting that he is merely a ‘guardian’ of the project. He expressed disappointment that Milei and his team unexpectedly withdrew their support despite prior commitments.
Additionally, Mauricio Novelli, an Argentine trader and head of ‘Tech Forum’, describes himself as a ‘crypto asset advisor’and organizer of tech-themed events. He has known Javier Milei for years and stated that Tech Forum had provided ‘advisory support’ to Kelsier Ventures and KIP Protocol in launching $LIBRA, yet had ‘no access’ or ‘knowledge’of the funds generated.
Milei’s Response to the Controversy
In a defiant television interview, Javier Milei downplayed his involvement, asserting that he did not ‘promote’ or ‘recommend’ the cryptocurrency but merely ‘shared’what he found to be ‘interesting’. He characterized those who invested in the crypto asset as ‘volatility traders’ who were fully aware of the risks, likening their situation to that of gamblers who lose money at a casino. He referred to the matter as ‘a private issue’between individuals.
A segment from this interview, which was later deleted, went viral, showcasing a conversation regarding the X account used to share the announcement:
– ‘It’s my personal account,’ the president stated.
– ‘Yes, but you are president…’ the interviewer replied, highlighting the potential for ‘legal repercussions’.
Legal Implications of the Scandal
Over a hundred complaintshave been lodged by various organizations and individuals, all of which are now under the scrutiny of a judge and prosecutor. The presidency’s anti-corruption office has been tasked with investigating the ‘possible misconduct’of government officials, including the president. In addition, a separate inquiry has been initiated by a specialized unit focusing on crypto assets and finance regarding the $LIBRA launch and all parties involved.
Javier Milei has claimed he has ‘nothing to hide’and is resolved to face any consequences: ‘If justice determines that a guillotine must cut a head, let’s proceed!’ The presidential spokesperson indicated that they are still uncertain about who will represent the president legally. As the head of state, Javier Milei enjoys judicial immunity, which can only be revoked through an impeachment process in parliament—an unlikely outcome. However, as a private citizen, he remains ‘under a constant threat of ordinary justice’, according to AFP attorney Adolfo Suarez Erdaire, a specialist in digital fraud.
Political Ramifications
Among the opposition, only the Kirchnerist party (center-left) has shown intent to initiate a ‘political trial’—a parliamentary procedure that could lead to impeachment. This move has little chance of successas it requires a two-thirds majority in both chambers. Former liberal president Mauricio Macri, leader of the PRO party, expressed on Tuesday that he does not doubt Javier Milei’s integrity but noted that this ‘serious episode’ has revealed ‘a negligent president’who must improve his support team.
Economically, the scandal has induced noticeable anxiety at the Buenos Aires Stock Exchange, which fell by 5.58% on Monday before rebounding by 6% the following day. Economy Minister Luis Caputo assured that the crisis would have ‘zero’ impact on discussions between Javier Milei and Kristalina Georgieva, the head of the International Monetary Fund (IMF), regarding a new financing agreement for Argentina.