Tue Feb 18 13:58:29 UTC 2025: ## Argentine President’s Crypto Endorsement Sparks Fraud Investigation, Market Turmoil

**Buenos Aires, Argentina** – Argentine President Javier Milei is embroiled in a major scandal following the dramatic rise and fall of the cryptocurrency $LIBRA, which he publicly endorsed before its value plummeted, resulting in significant investor losses. Federal prosecutors have launched an investigation into potential fraud, criminal association, and breach of duty, prompted by over 100 complaints filed in Argentina and the U.S.

Milei’s Friday night X (formerly Twitter) post endorsing the little-known token sparked a rapid surge in its value, reaching nearly $5 before crashing within hours. He subsequently deleted the post and denied involvement in its development, but critics allege a classic “rug pull” scheme, where developers inflate a token’s value before cashing out. The Observatorio del Derecho a la Ciudad NGO filed a lawsuit accusing Milei and government officials of illicit association, fraud, and dereliction of duty, claiming losses exceeding $4 billion and affecting over 40,000 people.

The Argentine fintech chamber also suggests the event aligns with a rug pull, and opposition lawmakers, including Leandro Santoro, are calling for impeachment proceedings, describing the incident as an “international embarrassment.” The Buenos Aires Stock Exchange reacted negatively, with the S&P Merval index dropping 5.6% on Monday. Former President Cristina Fernández de Kirchner labeled Milei a “crypto-scammer.”

While a government source anonymously claimed Milei was the victim of the fraud, the President’s Office admitted a recent meeting between Milei’s administration and representatives of KIP Protocol, the entity behind $LIBRA. The Anti-Corruption Office is also investigating. Meteora, the crypto exchange that listed $LIBRA, denies involvement, stating they “never had any access to the tokens or to Milei.” However, Hayden Mark Davis of KIP Protocol blamed Milei for the crash, alleging a withdrawal of support.

Digital fraud expert Javier Smaldone estimates nearly $107 million was siphoned off, with total transactions related to the scam reaching approximately $4.4 billion. The scandal raises concerns about the role of social media in financial markets and whether Milei’s actions violated Argentina’s Public Ethics Law.

Despite the mounting pressure and calls for congressional testimony and social media forensic analysis, Milei remains defiant, attributing the scandal to political opponents. While impeachment is considered unlikely due to a lack of legislative support, the scandal threatens Milei’s reform agenda and investor confidence in Argentina’s already volatile cryptocurrency sector.

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