Milei Faces Scrutiny Over Cryptocurrency Collapse in Argentina

BUENOS AIRES, Argentina — President Javier Milei of Argentina is under fire after promoting a controversial cryptocurrency, Libra, which experienced a dramatic rise and subsequent crash shortly after his endorsement on February 16, 2025.

Hours after publicly endorsing Libra, claiming it could stimulate Argentina’s economy by supporting small businesses, its value soared to $5 but plummeted to $1 within three hours as early investors cashed out. Economists and critics have raised concerns that the coin might be a scam or a Ponzi scheme, with allegations emerging that the launch could be a “rug pull”—a scheme where developers attract investments before abruptly withdrawing their funds.

In response to the uproar, Milei stated he was unaware of the project’s details, insisting that he no longer wished to promote it. In a social media post on the platform X, he noted, “The world wants to invest in Argentina – $LIBRA,” but later deleted the statement and acknowledged, “I did not know the details of the project and after learning about it, I decided not to continue promoting it.” He has since ordered an urgent investigation into the incident.

As the cryptocurrency’s value fluctuated, leading to an estimated $87.4 million liquidation by large stakeholders, economists and local analysts labeled the event as a significant financial debacle. The Kobeissi Letter, a financial analysis group, highlighted that gains of more than $4 million occurred at its peak market capitalization of about $4.6 billion before a rapid decline followed.

On February 17, the presidency released a statement indicating that the Anti-Corruption Office would probe any possible misconduct involving government officials, including the president himself. This scrutiny comes as opposition politicians, led by Esteban Paulon of the Socialist Party, pushed for an impeachment trial against Milei, demanding his testimony about the allegations of corruption tied to the launch.

Criticism from Argentine economists has been severe; many are questioning Milei’s judgment, considering his previously noted success in managing rampant inflation in the country. Javier Smaldone, a digital influencer scrutinizing potential financial fraud, called the operation a “global scam,” estimating profits gained exceeding $107 million.

Former President Cristina Kirchner condemned Milei, referring to him as a “crypto-scammer,” while others like Maximiliano Ferraro of the Civic Coalition are urging Parliamentary action to establish a commission to investigate the incident. Additionally, Francisco Onato, Milei’s personal lawyer, claimed that the president merely intended to spotlight a worthy project to rejuvenate the economy, insisting that no criminal intent was involved.

The controversy surrounding Milei’s promotion of Libra marks a rare case of a head of state publicly backing a cryptocurrency, drawing parallels to similar rapid rises and falls of crypto tokens associated with other political figures, including former U.S. President Donald Trump.

As the situation unfolds, Argentina’s political and economic landscape may face further implications from this incident, particularly as investigations are underway and calls for accountability intensify.