Argentine President Javier Milei has been criticised for endorsing a cryptocurrency token known as $LIBRA whose worth soared and collapsed in a matter of some hours, resulting in losses for a number of traders.
The event has sparked a political firestorm with Milei dealing with requires impeachment from the nation’s opposition events.
Cristina Fernández de Kirchner, the previous president of Argentina and Milei’s primary political opponent, stated that 1000’s who had trusted him misplaced tens of millions of {dollars} in all, “whereas many made fortunes as a result of privileged info.” Nonetheless, Milei has denied the allegation that he promoted a rip-off.
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’s what you need to know in regards to the $LIBRA token and why it has prompted such a stir within the South American nation.
What’s $LIBRA?
$LIBRA is a token issued by entrepreneur Hayden Davis, who can be the CEO of a crypto funding agency known as Kelsier Ventures, in line with a report by Bloomberg. KIP Protocol, a Web3 firm constructing a decentralised AI framework, reportedly performed a job within the launch of $LIBRA as nicely.
Nonetheless, KIP has claimed that it was solely invited post-$LIBRA’s launch “to handle / oversee the choice of funded tech tasks and supply technical infrastructure for AI initiatives.”
Announcement on $LIBRA
There was loads of misinformation surrounding the $LIBRA launch and KIP’s position. To make clear:
The token launch and market making had been absolutely dealt with by @KelsierVentures, represented by Hayden Davis, the initiators of the venture. Not one of the wallets…
— KIP Protocol (@KIPprotocol) February 15, 2025
The crypto token is hosted on the Solana blockchain platform, which is reportedly common amongst memecoin merchants because it affords quick transaction speeds at low charges.
The token might be bought by way of a hyperlink that directed customers to a web site known as vivalalibertadproject.com, a Spanish phrase generally utilized by Milei on the finish of his presidential speeches and social media posts. $LIBRA additionally echoes the identify of Milei’s political celebration, La Libertad Avanza
How is President Milei related to $LIBRA?
In a social media publish on Friday night time, February 14, Milei stated that $LIBRA would stimulate Argentina’s economic system and assist small companies develop. Linking to the web site of the token, he stated that it could “incentivize the expansion of the Argentine economic system, funding small corporations and Argentine ventures.”
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In keeping with a report by CNN, the $LIBRA token was created minutes earlier than Milei’s publish on X and the area identify of the web site linked within the publish had been registered on the identical day.
“Liberal Argentina is rising!!! […] the world desires to put money into Argentina,” Milei added in a publish from his official X account, which has greater than 3.8 million followers.
At launch, $LIBRA’s buying and selling worth was nearly zero and many of the token was held in just some digital wallets. After the Argentina president’s endorsement, the value of the token surged to nearly $5 and its market cap flew previous $4 billion.
Shortly after, a Group Observe appeared on the president’s X publish, urging customers to “confirm earlier than interacting with the venture” due to habits constant “with a rug pull.” Rug pull is a time period utilized by crypto traders to explain rip-off choices by builders who problem a token, entice traders, after which abruptly disappear, withdrawing all their cash.
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A number of hours later, Milei deleted the unique X publish and denied having any ties with the $LIBRA token. “I used to be not conscious of the small print of the venture and after having turn into conscious of it I made a decision to not proceed spreading it,” he stated.
Inside the subsequent three hours, its worth crashed to mere cents. Within the subsequent 5 hours, over $4.4 billion within the token’s market cap was reportedly worn out.
Javier Milei simply DESTROYED the memecoin market:
Hours in the past, Argentinian President Milei launched a memecoin, $LIBRA, for “the expansion of their economic system.”
Inside 5 hours, over -$4.4 BILLION of market cap was erased.
Is that this the most important rug pull in historical past?
(a thread) pic.twitter.com/t4T69r851d
— The Kobeissi Letter (@KobeissiLetter) February 15, 2025
“Inside 3 hours of the launch, insiders in $LIBRA started cashing out. In keeping with Bubblemaps, $87.4 MILLION was cashed out inside the first 3 hours. Moreover, 82% of $LIBRA was held in a single cluster and no tokenomics had been shared with the general public,” analysts at The Kobeissi Letter, a world capital markets analysis agency, stated in a publish on X.
Hayden Davis, who initiated the launch of the token, has acknowledged that he has held onto among the income regardless of the declines.
Addressing Libra: pic.twitter.com/lUlAADWnkq
— Kelsier (@KelsierVentures) February 16, 2025
What was the political fallout?
On Saturday night time, February 17, Milei took to social media once more, describing his endorsement of $LIBRA as a routine promotion of a enterprise and likening it to bulletins he makes “each day” about entrepreneurs who need to launch tasks in Argentina that create jobs.
He added that he had had two conferences in regards to the token, one in October 2024 and the opposite in January this 12 months, however maintained that he had no involvement in its launch.
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Later that very same day, Milei’s workplace introduced an official investigation into the matter. “President Javier Milei has determined to right away contain the Anti-Corruption Workplace to find out whether or not there was improper conduct on the a part of any member of the nationwide authorities, together with the president himself,” the assertion learn.
In the meantime, Argentina’s opposition events such because the Union for the Homeland coalition slammed Milei over the incident and stated it could request impeachment proceedings in opposition to the president.
Hayden Davis additionally blamed Milei for the collapse of $LIBRA. “Regardless of prior commitments, Milei and his crew unexpectedly modified their place, withdrawing their assist and deleting all earlier posts on social media,” he stated.
The controversy surrounding $LIBRA has prompted comparisons with US President Donald Trump’s memecoin known as $Trump that was launched on January 17, alongside $Melania, a separate meme coin promoted by First Woman Melania Trump.
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On the launch, Trump pitched the memecoin to his supporters as a method “to rejoice every part we stand for: WINNING!”. Nonetheless, the official web site of the memecoin additionally carries a disclaimer noting that $Trump isn’t “an funding alternative” or “a safety”, however a technique to present assist to Trump.
The potential for these memecoins to inflate Trump’s private fortune had raised authorized and moral considerations amongst US lawmakers and former authorities officers.
Milei and Trump are reportedly scheduled to fulfill in Washington DC this week to debate potential tariff exemptions for Argentina and safe assist for the South American nation to obtain more cash from the Worldwide Financial Fund (IMF), amongst different points.
