Argentine President Javier Milei has been criticised for endorsing a cryptocurrency token called $LIBRA whose price soared and collapsed in a matter of a few hours, leading to losses for several investors.
The development has sparked a political firestorm with Milei facing calls for impeachment from the country’s opposition parties.
Cristina Fernández de Kirchner, the former president of Argentina and Milei’s main political opponent, said that thousands who had trusted him lost millions of dollars in all, “while many made fortunes due to privileged information.” However, Milei has denied the allegation that he promoted a scam.
La Oficina del Presidente informa que el pasado 19 de octubre el Presidente Javier Milei mantuvo un encuentro con los representantes de KIP Protocol en Argentina en el que se le comentó la intención de la empresa de desarrollar un proyecto llamado “Viva la Libertad” para…
— Oficina del Presidente (@OPRArgentina) February 16, 2025
Here is what you should know about the $LIBRA token and why it has caused such a stir in the South American country.
What is $LIBRA?
$LIBRA is a token issued by entrepreneur Hayden Davis, who is also the CEO of a crypto investment firm called Kelsier Ventures, according to a report by Bloomberg. KIP Protocol, a Web3 company building a decentralised AI framework, reportedly played a role in the launch of $LIBRA as well.
However, KIP has claimed that it was only invited post-$LIBRA’s launch “to manage / oversee the selection of funded tech projects and provide technical infrastructure for AI initiatives.”
Announcement on $LIBRA
There has been a lot of misinformation surrounding the $LIBRA launch and KIP’s role. To clarify:
The token launch and market making were fully handled by @KelsierVentures, represented by Hayden Davis, the initiators of the project. None of the wallets…
— KIP Protocol (@KIPprotocol) February 15, 2025
The crypto token is hosted on the Solana blockchain platform, which is reportedly popular among memecoin traders as it offers fast transaction speeds at low fees.
The token could be purchased via a link that directed users to a website called vivalalibertadproject.com, a Spanish phrase commonly used by Milei at the end of his presidential speeches and social media posts. $LIBRA also echoes the name of Milei’s political party, La Libertad Avanza
How is President Milei connected to $LIBRA?
In a social media post on Friday night, February 14, Milei said that $LIBRA would stimulate Argentina’s economy and help small businesses grow. Linking to the website of the token, he said that it would “incentivize the growth of the Argentine economy, funding small companies and Argentine ventures.”
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According to a report by CNN, the $LIBRA token was created minutes before Milei’s post on X and the domain name of the website linked in the post had been registered on the same day.
“Liberal Argentina is growing!!! […] the world wants to invest in Argentina,” Milei added in a post from his official X account, which has more than 3.8 million followers.
At launch, $LIBRA’s trading price was almost zero and most of the token was held in just a few digital wallets. After the Argentina president’s endorsement, the price of the token surged to almost $5 and its market cap flew past $4 billion.
Shortly after, a Community Note appeared on the president’s X post, urging users to “verify before interacting with the project” because of behavior consistent “with a rug pull.” Rug pull is a term used by crypto investors to describe scam offerings by developers who issue a token, attract investors, and then suddenly disappear, withdrawing all their money.
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A few hours later, Milei deleted the original X post and denied having any ties with the $LIBRA token. “I was not aware of the details of the project and after having become aware of it I decided not to continue spreading it,” he said.
Within the next three hours, its value crashed to mere cents. In the next five hours, over $4.4 billion in the token’s market cap was reportedly wiped out.
Javier Milei just DESTROYED the memecoin market:
Hours ago, Argentinian President Milei launched a memecoin, $LIBRA, for “the growth of their economy.”
Within 5 hours, over -$4.4 BILLION of market cap was erased.
Is this the biggest rug pull in history?
(a thread) pic.twitter.com/t4T69r851d
— The Kobeissi Letter (@KobeissiLetter) February 15, 2025
“Within 3 hours of the launch, insiders in $LIBRA began cashing out. According to Bubblemaps, $87.4 MILLION was cashed out within the first 3 hours. Furthermore, 82% of $LIBRA was held in one cluster and no tokenomics were shared with the public,” analysts at The Kobeissi Letter, a global capital markets research firm, said in a post on X.
Hayden Davis, who initiated the launch of the token, has acknowledged that he has held onto some of the profits despite the declines.
Addressing Libra: pic.twitter.com/lUlAADWnkq
— Kelsier (@KelsierVentures) February 16, 2025
What was the political fallout?
On Saturday night, February 17, Milei took to social media again, describing his endorsement of $LIBRA as a routine promotion of a business and likening it to announcements he makes “daily” about entrepreneurs who want to launch projects in Argentina that create jobs.
He added that he had had two meetings about the token, one in October 2024 and the other in January this year, but maintained that he had no involvement in its launch.
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Later that same day, Milei’s office announced an official investigation into the matter. “President Javier Milei has decided to immediately involve the Anti-Corruption Office to determine whether there was improper conduct on the part of any member of the national government, including the president himself,” the statement read.
Meanwhile, Argentina’s opposition parties such as the Union for the Homeland coalition slammed Milei over the incident and said it would request impeachment proceedings against the president.
Hayden Davis also blamed Milei for the collapse of $LIBRA. “Despite prior commitments, Milei and his team unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media,” he said.
The controversy surrounding $LIBRA has prompted comparisons with US President Donald Trump’s memecoin called $Trump that was launched on January 17, alongside $Melania, a separate meme coin promoted by First Lady Melania Trump.
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At the launch, Trump pitched the memecoin to his supporters as a way “to celebrate everything we stand for: WINNING!”. However, the official website of the memecoin also carries a disclaimer noting that $Trump is not “an investment opportunity” or “a security”, but a way to show support to Trump.
The potential for these memecoins to inflate Trump’s personal fortune had raised legal and ethical concerns among US lawmakers and former government officials.
Milei and Trump are reportedly scheduled to meet in Washington DC this week to discuss possible tariff exemptions for Argentina and secure support for the South American country to receive more money from the International Monetary Fund (IMF), among other issues.