Argentina’s Milei Under Investigation for Crypto Scandal Amid Market Collapse

BUENOS AIRES, Argentina (AP) — Argentine President Javier Milei is facing a judicial investigation after his endorsement of the cryptocurrency $LIBRA sparked controversy and significant financial loss for investors. The inquiry, assigned to Federal Judge María Servini on Monday, follows allegations that Milei’s promotion may have constituted fraud.

The turmoil began on February 16 when Milei used his social media platform X to endorse $LIBRA, claiming it aimed to spur economic growth by funding small businesses in Argentina. The cryptocurrency enjoyed a brief surge in value, reaching a market capitalization of over $4 billion.

However, the value of $LIBRA plummeted shortly after its launch, leading to calls of a potential scam. By Monday, Argentina’s stock market had fallen more than 5%, reflecting investor concerns and the fallout from the scandal. Opposition lawmakers have threatened impeachment proceedings against Milei, raising questions about his future in office.

Lawyers filed formal complaints against the President on Sunday, accusing him of fraud. Opponents allege that Milei’s involvement constitutes an illicit association designed to defraud the public. Jonatan Baldiviezo, one of the plaintiffs, emphasized the purported severity of the situation. “Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” Baldiviezo stated.

Milei’s office has denied any wrongdoing, asserting that he had no connection to the coin’s development and claiming that he removed his promotional post to limit exposure after witnessing the negative public reaction. “The president shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina,” the statement read.

Despite the scandal, Milei insists he acted in good faith, arguing that the volatility of cryptocurrencies is common knowledge. “Those who entered there voluntarily knew what they were getting into,” he asserted during an interview with Todo Noticias.

Meanwhile, his administration has begun an internal inquiry through the country’s Anti-Corruption Office to assess whether any impropriety occurred related to the $LIBRA cryptocurrency. The investigation’s outcome could significantly impact Milei’s administration, especially as it approaches mid-term elections later this year.

Critics have also suggested that his actions might have been part of a broader pattern of reckless promotion of private ventures. The controversy around this cryptocurrency scheme has galvanized opponents, with some calling for a special parliamentary commission to investigate Milei’s actions further.

As the situation develops, Milei continues to downplay the implications of the scandal, asserting that he has “nothing to hide” and remains focused on his economic agenda, which has emphasized deregulation and austerity policies aimed at curbing inflation.