Argentine President Javier Milei’s credibility hangs by a thread after a cryptocurrency promotion gone wrong rocked South America’s third-largest economy this week. The libertarian leader’s endorsement of a digital token called $LIBRA has sparked legal challenges and demands for his impeachment, throwing his administration into its worst crisis since taking office.
Market Upheaval Follows Presidential Crypto Tweet
The drama began when Milei posted about $LIBRA on social media platform X on Friday, linking to a website bearing his catchphrase “viva la libertad.” Within hours, the token’s value shot up before plummeting, leaving thousands of investors empty-handed. The cryptocurrency was meant to boost economic growth by funding small businesses and startups.
Argentina’s benchmark S&P Merval stock index fell 5.6% as word of the scandal spread. The country’s fintech chamber raised concerns about a potential “rug pull” scam, where developers lure investors before quickly withdrawing funds.
The peso dropped 2% against the dollar on the parallel exchange market, adding to the nation’s economic woes.
Legal Walls Close In Around President
Federal Judge Maria Servini now leads the investigation into Milei’s role in the cryptocurrency’s promotion after more than 100 complaints reached Argentina’s judiciary. Lawyer Jonatan Baldiviezo and colleagues filed fraud complaints, claiming the president played an “essential” part in what they call an “illicit association.”
The scheme allegedly cost more than 40,000 people their investments, with losses topping $4 billion. Even one of the token’s developers, Hayden Davis, blamed Milei for the collapse, citing unexpected withdrawal of presidential support.
The token was launched on Meteora, the same platform that hosted January’s ill-fated $Trump meme coin.
Presidential Defence Raises Eyebrows
Milei’s office insisted the president knew nothing about the token’s development.
A government source went further, claiming Milei himself was the fraud’s biggest victim. Yet documents show his administration met twice with KIP Protocol representatives at the presidential office before the launch.
In a television interview, Milei acknowledged the episode as "a slap in the face" while defending his tech-friendly stance. "I'm a techno-optimist," he said, "and this was proposed to me as an instrument to help fund Argentine projects."
He promised to strengthen his vetting procedures for future endorsements.
Political Fallout Threatens Reform Agenda
Former President Cristina Kirchner seized the moment to brand Milei as the “hook” for a “digital scam.”
Socialist Party politician Esteban Paulón vowed to start impeachment proceedings. The mainstream right-wing PRO party called the situation “serious” but dismissed impeachment calls as political opportunism.
Milei’s approval ratings, holding steady at 50% through a year of bold economic reforms, now hang in the balance. The scandal threatens to weaken his minority government’s position in congress, where it seeks to pass electoral reform legislation.
Political analysts warn the episode could harm his administration’s bargaining power.
Path Forward Remains Unclear
The President’s Office announced the Anti-Corruption Office would investigate the matter. While impeachment seems unlikely without a two-thirds majority in congress, the scandal threatens to slow Milei’s deregulation drive ahead of October’s midterm elections.
Argentina’s fintech chamber noted that most $LIBRA buyers came from the US and Asia, with few local investors affected. The token never appeared on exchanges used by most Argentine crypto traders. Yet the political damage looms large for a president who built his reputation on economic expertise.
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