The cryptocurrency $LIBRA was supposed to be "a private project" that was going to be dedicated to "stimulating the growth of the Argentine economy, but experts said it could be a scam or Ponzi scheme."
The Argentine government announced on Saturday night an "urgent investigation" into the launch of a cryptocurrency promoted on Friday by President Javier Milei, which collapsed hours after a post on social media by the ultra-liberal amid accusations of fraud and calls for a "political trial."
According to images reproduced by the local press, Milei had posted a message on X, pinned to her profile for more than five hours, with a link to an initiative called "Viva La Libertad Project", which emulated her slogan "Long live freedom, damn it."
"The world wants to invest in Argentina. $LIBRA," said the president's message published on Friday, with the name of the token, a unit of digital value based on blockchain technology that is not backed by real money.
The cryptocurrency $LIBRA was "a private project" that was going to be dedicated to "incentivizing the growth of the Argentine economy, funding (financing) small Argentine businesses and startups."
But economists and crypto experts in Argentina, as well as representatives of the opposition political spectrum, quickly criticized Milei and pointed out that this digital asset could be a scam or Ponzi scheme.
Hours later, the president deleted the message promoting the cryptocurrency. "I was not aware of the details of the project and after having become aware of it, I decided not to continue spreading it," Milei explained on X on Saturday after midnight.
As criticism mounted, the Argentine presidency announced on Saturday night that, "in light of the events," Milei "has decided to immediately refer the matter to the Anti-Corruption Office (OA) to determine whether there was improper conduct on the part of any member of the national government, including the president himself."
He also announced the creation of an "Investigative Task Force" within the orbit of the president, charged with "initiating an urgent investigation into the launch of the cryptocurrency $LIBRA and all companies or persons involved in this operation," the presidency added in a statement on X.
Request for impeachment
According to The Kobeissi Letter magazine, which specializes in the capital market, nearly 80% of the $LIBRA asset was in the hands of very few holders before Milei's support.
Following the president's message, the value of the coin grew exponentially, from tenths to a peak of $4,978; the original holders began selling with a profit of millions, but the value of the asset then collapsed.
"What happened is what in the world of negotiable securities is called a 'rug pull'," Javier Smaldone, a computer specialist and renowned digital influencer dedicated to exposing pyramid schemes, told AFP.
"A cryptocurrency is created, it can also be done with shares, it is given initial liquidity so that what was created is worth something and then an advertising campaign of some kind is started to attract people," explained Smaldone about the role that Milei's promotion could have played.
The specialist explained that as "people keep buying, the value of that asset goes up (...) until at some point those who manage the liquidity withdraw the money and the thing collapses."
According to Smaldone, the entire operation lasted "two hours or so" and involved a volume of approximately $4.4 billion.
"What has been found so far is that the money they stole is around 107 million dollars," he said regarding the amount that was swindled, adding: "It's probably more."
Also on Saturday, the Union for the Homeland bloc, headed by Peronism, in the Chamber of Deputies of the National Congress announced that on Monday they will present "a request for impeachment against the President of the Nation" in light of what happened.
Opposition figures denounced the move, including former president (2007-2015) and leader of Peronism (center-left) Cristina Kirchner, who on her X account called Milei a "crypto scammer" and said that he operated "as a hook for a digital scam."
Senator for the UCR (center) Martín Lousteau pointed out that this was "the second time that, as an official, (Milei) advertises assets from the crypto world that end up being a scam."
In 2021, the then congressman and now president promoted the CoinX platform, which offered 8% monthly profits in dollars and is now also under investigation for alleged fraud.
Throughout Saturday, various alleged victims of the scheme began to appear on social media, such as the American trader and streamer Threadguy, with hundreds of thousands of followers on his platforms, who claimed to have lost "250,000 (dollars) in this currency."
"Today was a difficult day. The president of Argentina (...) cheated us," he lamented.
