February 20, 2025
Milei
“The president makes comments promoting the token and causes it to appreciate in value. The owners themselves take advantage of the rise and the investors are left with the losses”
The recent financial scandal surrounding the $LIBRA cryptocurrency has put the far-right Argentine president, Javier Milei, at the center of an unprecedented scandal in Argentina, Latin America and perhaps the world. His initial endorsement of this digital asset, followed by a sudden distancing, has unleashed an avalanche of criticism and accusations.
Now, from different financial and political sectors, they have described this as a fraudulent market manipulation scheme. Martín Lousteau, senator for the Radical Civic Union (UCR, right), pointed out that “this is designed as a scam and President Milei is part of it. It is the second time that, as an official, [Milei] has publicized assets from the crypto world that end up being a scam”.
It is recalled that, in 2021, when the libertarian leader was a member of parliament, he recommended CoinX, an investment platform that was later investigated for fraud. The National Securities Commission (CNV) banned its operations after determining that it was not authorized to offer investments. In 2023, the company faced formal complaints of fraud and police raids.
The premeditated rise and fall
On February 14, 2025, Milei used his account on X to promote a project called the “Viva la Libertad Project,” with which he claimed that investments in cryptocurrencies would serve to “fund small businesses.” In other words, it was presented as a mechanism to attract financial resources aimed at boosting the operations, projects or expansion of enterprises.
The $LIBRA cryptocurrency, linked to this project and backed by Milei’s message about the free market and economic decentralization, saw a dramatic increase in its value, reaching $4,978 per unit in a matter of hours.
But the bubble soon burst. Suddenly, the Argentine president eliminated its publication without explanation, which sparked panic among investors and caused the value of the currency in question to plummet, falling below a dollar and continuing to fall. From then on, thousands of investors watched their money disappear in a matter of minutes.
Specialists in crypto-assets have identified this episode as a “rug pull”, a fraudulent scheme in which the creators and promoters of an asset buy at the beginning, when it is worth almost nothing, then artificially inflate its value and then sell their shares and abandon the project before the collapse, guaranteeing a fraudulent extraction of money.
Luis Eduardo Daza, a financial intelligence consultant, confirms what happened and explains that this “happens with people who influence the market. This crypto is a project and cannot be classified as viable, as it has no specific backing and is based more on trust. The president makes comments promoting it and causes it to appreciate in value. The owners themselves take advantage of the rise and the investors are left with the losses”.
The figures reflect the magnitude of the deception: just nine people managed to capture nearly 87 million dollars, while more than 44,000 investors were caught in the fall.
When it seemed that the controversy had run out of surprises, Milei reignited the scandal. On February 17, the Argentine president shared a message from economist Darío Epstein on X, detailing the “complex steps” to acquire $LIBRA in its first hours of trading, in a forced attempt to cover up the overflow of “cryptogate”.
Once again, other users interpreted the post as a new endorsement of the digital asset, triggering a wave of instant purchases, the end of which is well known: the price of $LIBRA, which had been in free fall, took an unexpected leap from 38 to 77 cents on the dollar, only to plummet again minutes later.
Epstein’s post broke down five steps needed to acquire $LIBRA, including creating a digital wallet and trading on a decentralized exchange in less than two hours.
But the market does not work with nuances. For investors, any gesture from Milei on the subject carried weight. And his publication was enough to generate a new express bubble which, as expected, lost all its value in minutes, again.
The loss records were also updated, now involving more than 74,000 investors who lost a total of $286 million. And on the other hand, reports on the flow of money on the blockchain revealed that a few privileged players made extraordinary gains.
The most profitable account pocketed $8.5 million in less than three hours, while the total loot of those who entered with inside information would exceed $100 million.
The interview: clarifies and obscures
The recent interview given by Javier Milei to the Argentine news channel TN has generated a wave of questions and mockery due to the divergence between the version broadcast on television and the original recording published on YouTube.
The raw footage, later released on the platform, showed how the journalist Jonatan Viale questioned Milei about his role in promoting $LIBRA, pointing out the difficulty of dissociating his presidential office from the promotion of a financial asset.
At a critical moment in the interview, when the State’s involvement in the judicial investigation into the case was being addressed, and Milei insisted that he had made the disclosure “as a citizen”, the chief presidential adviser Santiago Caputo burst onto the set to stop the line of questioning and suggest a repeat of the president’s answer.
During the interview, Milei adopted a defensive stance, insisting that his intention in mentioning $LIBRA on the social network was simply to “disseminate” a project he considered innovative, and not a promotion with personal interests.
However, this response did not address the central question of the debate: to what extent can a head of state disassociate himself from the political and ethical responsibility of promoting a financial asset without regulatory guarantees?
Likewise, the journalist presented data on the losses of the investors who dared to bet on Milei’s project and also pointed out the profits of a few, to which Milei replied that apparently the majority of those affected were not Argentines: “Those affected were not 40,000, but barely 5,000, and furthermore, they were not Argentines, but international financial operators who knew perfectly well the risk they were taking. It’s like someone playing Russian roulette and getting the bullet,” he said, minimizing the impact.
The lack of details about the government’s link to the cryptocurrency promoters, the intervention of his team of advisers in the interview and the omission of key information have weakened confidence in the administration’s transparency.
The Argentine president, as he always does, has described the controversy as an attempt by the “establishment” to discredit his administration, suggesting that the pressure on the case responds more to political interests than to a legitimate concern for financial regulation.
In this way, the current episode, and counting the CoinX one, only confirms a pattern of behavior in which Milei uses his image and influence to promote speculative schemes that end up harming those who participate.
Furthermore, the rise of cryptocurrencies in Argentina responds to a broader phenomenon of distrust of traditional banking institutions in a context of chronic economic crisis and high inflation.
However, the lack of regulation has allowed figures such as the Argentine far-right politician to take advantage of this situation, promoting fraudulent digital assets in a context of unbridled speculation.
The question that remains unanswered is: what consequences will this scandal have for Milei?
To date, more than 100 complaints have been filed against Milei. The National Judiciary has opened a case file to assess whether there are grounds to initiate a criminal investigation against the leader and other possible suspects, however this approach implies a sign of complicity.
The accusations include crimes of fraud, negotiations incompatible with public office, violation of public ethics and illicit association. The first lawsuit was brought by former congressman Claudio Lozano, activist María Eva Koutsovitis and lawyers from the Right to the City Observatory. The plaintiffs claim that Milei promoted the “Viva La Libertad Project” and the token operation without due backing from the National Securities Commission, which would have left investors unprotected.
Thus, the $LIBRA scandal is not just another chapter of financial fraud within the crypto world, but the materialization of an ideology that, in its crudest (‘libertarian’) version, reduces economics to the law of the strongest. Under the banner of the supposed absolute freedom of the market, without regulations or controls, what really emerges is a system where the big financial predators engulf small investors with total impunity.
Milei’s crypto-scam exposes his libertarian dogma: the abuse of power is justified as “market risk” and fraud as a “demand-side correction”. The victims of this fraud, lacking regulations to defend them, are forced to put up with the whip of the invisible hand of the market and its “natural” laws.
Source: Mision Verdad, translation Resumen Latinoamericano – English