Pulling the Rug

Argentine President Javier Milei is facing multiple lawsuits and calls for impeachment this week after promoting a cryptocurrency on social media, which surged in value before collapsing, leading to major financial losses and accusations of market manipulation, the Associated Press reported.

On Friday, Milei took to X and endorsed $LIBRA, a cryptocurrency linked to the Viva La Libertad project, which claims to support small businesses and startups.

The token’s value spiked following the post but plummeted within hours after Milei deleted it. The president later claimed that he had not been fully informed about the project and removed his endorsement to prevent speculation.

But the scandal triggered a series of legal accusations, including fraud, dereliction of duty, and financial misconduct from opposition lawmakers, legal professionals, and civil society groups.

On Sunday, Argentine lawyers and economists filed a fraud complaint in court against Milei and other officials, alleging that the libertarian president played a critical role in the financial losses suffered by investors.

Lawyers have accused him of orchestrating a “rug pull” scam, a common crypto fraud where a token is inflated in value before crashing, leaving early insiders with profits while other investors face losses.

Meanwhile, the opposition lawmakers announced plans to submit an impeachment request, calling Milei’s involvement “a scandal without precedent.”

In response to the backlash, Milei called on Argentina’s Anti-Corruption Office to investigate the case and formed a presidential task force to examine the cryptocurrency’s launch.

Still, the controversy deepened with revelations that Milei and senior government officials had previously met with representatives of KIP Protocol, the company behind $LIBRA, before the launch of the cryptocurrency, according to the Buenos Aires Herald.

While Milei’s administration insists these meetings were routine, KIP Protocol has publicly disputed its role, claiming it never pitched a cryptocurrency project to the president.

Complicating the situation is the involvement of Hayden Mark Davis of Kelsier Ventures, which was also involved in developing and creating $LIBRA. On Sunday, Davis, who initially blamed Milei for the token’s collapse, later posted a video admitting, “I am, indeed, Javier Milei’s adviser.” He promised to reinvest lost funds into the project within 24 to 48 hours.

The scandal has also revived scrutiny of Milei’s past promotion of CoinX, a crypto investment platform that collapsed in 2021 amid accusations of serving as a Ponzi scheme.

Under Argentine law, elected officials are prohibited from advertising private ventures, making Milei’s promotion of $LIBRA a potentially illegal act.