Argentine President Milei denies role in ‘cryptogate’ as prosecutors launch probe into $LIBRA crash

Nevin Al Sukari - Sana'a - People sit in a restaurant as Argentina’s President Javier Milei is seen on television during an interview, in Buenos Aires, Argentina, February 17, 2025. — Reuters pic

BUENOS AIRES, Feb 18 — Argentine President Javier Milei on Monday denied promoting a cryptocurrency that crashed, losing investors billions of dollars and prompting a flood of complaints, as prosecutors reportedly prepare an investigation into the scandal.

“I did not promote it, I spread it,” Milei told broadcaster TN, adding that it “is a problem between private parties because the State does not play a role here.”

“I acted in good faith,” he said.

Argentina’s federal prosecutor’s office will examine whether Milei engaged in fraud or criminal association or was in breach of his duties when he praised the $LIBRA cryptocurrency on social media Friday evening, according to news reports.

The currency’s value soared then crashed, and Milei deleted his blessing hours later, saying he had made a mistake.

Argentine economists, crypto specialists and opposition political figures criticised the self-declared “anarcho-capitalist” president, an economist by training, and said the digital asset could be a fraud or a Ponzi scheme.

Industry observers said the operation was likely a “rug pull” — a scam where developers unveil a crypto token, attract investors, then quickly cash out.

Rights NGO Observatory for the Right to the City, one of several complainants, alleges Milei formed part of a “criminal organisation that organized a fraud with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with losses of more than US$4 billion.”

The Kobeissi Letter, a publication that provides analysis on global capital markets, said on X Friday that within minutes of its launch, “multiple large holders began liquidating MILLIONS of USD worth of $LIBRA.”

“This included gains of +$4 million or more as $LIBRA rose to $4.6 billion in market (capitalisation),” it reported.

On Monday, Milei said he had “nothing to hide” from an investigation.

He said that those who carried out the transactions, including “a lot of bots,” were people who “knew very well what the risk was.”

Nevertheless, former president and opposition figure Cristina Kirchner called Milei a “crypto-scammer” and opposition parliamentarians announced they would institute impeachment proceedings against him.

Any such proceedings would be highly unlikely to succeed, however, as they would require a two-thirds majority in the lower house.

Other parties are seeking the creation of a special parliamentary commission to question Milei.

Improper conduct?

The Buenos Aires Stock Exchange closed 5.58 per cent down Monday from Friday’s closing levels, with drops of up to eight per cent for some stocks.

The presidency on Saturday announced that Argentina’s Anti-Corruption Office would be tasked with determining whether any improper conduct occurred.

It would also create a task force to carry out an “urgent investigation into the launch of the cryptocurrency $LIBRA, and all companies or individuals involved.”

The prosecutor’s office will also look into Julian Peh — the CEO of companies that participated in the creation of $LIBRA — as well as Chamber of Deputies president Martin Menem, who had reposted Milei’s original endorsement.

Milei said he had learned an “interesting lesson” from the episode, and that he would have to “raise the filters” around him.

Political scientist Carlos Germano told AFP that the case “affects his (Milei’s) credibility,” though his efforts to combat inflation — at its lowest in four years — remain popular with the electorate.

Milei continued with his duties Monday, hosting Republican US Senator Steve Daines in Buenos Aires. The president is due to visit the United States later this week. — AFP