Argentine lawyers have filed fraud charges against President Javier Milei following his promotion of a cryptocurrency called $LIBRA on his social media accounts. The cryptocurrency, developed by KIP Protocol and Hayden Davis, was promoted by Milei on X (formerly Twitter) as a coin designed to encourage economic growth by funding small businesses and startups. However, just hours after his post, the value of $LIBRA collapsed, leading to significant financial losses for early investors.
The incident has sparked outrage, with critics accusing the president of potentially being involved in a fraudulent scheme known as a “rug pull,” where developers entice investors with a promising token and then abandon it once its value inflates, rendering the token worthless.
The President’s Response and Legal Action
Following the collapse of $LIBRA’s value, Milei deleted the post and denied any involvement in the cryptocurrency’s development. His office clarified that Milei was not involved in any phase of the coin’s creation, explaining that the post was removed to prevent further speculation and limit the exposure of the project after the backlash.
Jonatan Baldiviezo, one of the plaintiffs, argued that Milei’s actions constituted part of a fraudulent operation, claiming the president’s post played a crucial role in promoting the coin. The plaintiffs also suggested that Milei violated Argentina’s Public Ethics Law by sharing information about a project that ultimately led to financial losses.
Marcos Zelaya, Baldiviezo, along with María Eva Koutsovitis, an engineer, and Claudio Lozano, an economist who once led Argentina’s Central Bank, filed the legal petition against Milei. They called for an investigation into what they viewed as an illicit partnership behind the $LIBRA promotion. Criminal justice authorities are expected to appoint a judge or prosecutor to review the case.
The “Rug Pull” Allegation
The plaintiffs compared the $LIBRA episode to a common cryptocurrency scam called a “rug pull,” where developers launch a coin to attract investments but later abandon it, causing investors’ funds to become worthless. The allegation suggests that Milei’s promotion of the coin contributed to the collapse of its value.
The president’s office contended that the post about KIP Protocol’s project was simply a part of his regular practice of supporting entrepreneurial initiatives to create jobs and attract investment in Argentina. Milei’s office reiterated that he was not directly involved in the cryptocurrency’s development.
Investigation and Potential Legal Consequences
Milei has since stated that he was unaware of the details surrounding $LIBRA’s development and blamed his political adversaries for exploiting the situation. He emphasized that he deleted the post after being informed about the project’s details.
In response to the growing controversy, Milei’s administration confirmed that the country’s Anti-Corruption Office would begin an immediate investigation. The administration also acknowledged meetings between KIP Protocol representatives, including Hayden Mark Davis, and officials within the president’s office.
“We will provide all gathered information to the judiciary to determine if any crimes were committed by individuals or companies linked to KIP Protocol,” the statement from the president’s office said.
KIP Protocol’s Role and Fallout
Hayden Mark Davis, a representative of KIP Protocol, publicly blamed President Milei for the collapse of $LIBRA, accusing him and his team of unexpectedly retracting their support and deleting social media posts related to the project. Davis claimed that the withdrawal of support caused the cryptocurrency’s sudden devaluation.
This incident has raised serious concerns about the intersection of cryptocurrency promotion and political influence, with implications for Argentina’s regulatory and ethical standards moving forward.
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