Judge Assigned to Investigate Javier Milei’s Role in Crypto Scandal

Then-Argentine President-elect Javier Milei arrives at the National Congress in Buenos Aires, Argentina, on Nov. 29, 2023. Photo by Tomas Cuesta/Getty Images

A judge has been assigned to investigate Argentine President Javier Milei’s role in promoting a cryptocurrency that crashed.

The controversy erupted on Feb. 14, when Milei directed his 3.8 million followers on X to a site for a cryptocurrency project called LIBRA.

“This private project will be dedicated to encouraging the growth of the Argentine economy,” he wrote in the now-deleted post. “The world wants to invest in Argentina.”

LIBRA surged to a $4.4 billion market capitalization, but as insiders cashed out $100 million, the price collapsed, causing losses to its investors.

On Feb. 17, an investigation was randomly assigned to veteran Federal Judge Maria Servini after local media reported that more than 100 complaints had been filed with Argentina’s judiciary.

Impeachment

The scandal is a blow to Milei, a self-proclaimed anarcho-capitalist, who was inaugurated as Argentina’s president in 2023 after defeating Sergio Massa, economy minister for Alberto Fernández’s socialist administration.

Opposition lawmakers on Saturday called for an impeachment trial.

Critics have warned that the LIBRA coin, a so-called memecoin developed by Hayden Mark Davis, could be a potential “rug pull.”

This is a type of scam where project developers withdraw all funds from a project and abandon it. Davis has denied wrongdoing.

TRUMP, a token launched in January by U.S. President Donald Trump—fueled by both internet memes and the popularity of his Make American Great Again movement—plunged by $500 million in market value within 30 minutes of LIBRA’s collapse, according to market data.

Observatorio del Derecho a la Ciudad, a local NGO, filed a lawsuit accusing Milei and other government officials of illicit association, fraud, and breach of their duties as public officials.

“We denounce Milei as being part of an illicit association that organized a scam with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with a loss of more than $4 billion,” it said on its website.

Milei

The Office of the President released a statement that said that Milei held a meeting with representatives of a tech company called KIP Protocol in Argentina.

The government claimed the company expressed its intention to develop a project called “Viva la Libertad,” referring to the phrase “Viva la libertad!” that Milei uses.

It said that Davis had no ties to the Argentine government and was introduced by KIP Protocol representatives as one of their partners in the project.

It said that the president shared a post on his personal accounts announcing the launch of KIP Protocol’s project and said that he does this “regularly with many entrepreneurs looking to launch initiatives in Argentina to create jobs and attract investment.”

KIP denied that it initiated the project and profited from the token launch in a statement.

Milei also accused his political enemies of trying to take advantage of the situation.

“To the filthy rats of the political caste who want to take advantage of this situation to do harm, I want to say that every day they confirm how vile politicians are,” he said on X on Feb. 15.

Davis told American businessman and Barstool Sports owner David Portnoy on his podcast on Monday that he “had no desire to run off with the money.”

When asked about the $100 million, Davis said: “It’s definitely not mine. It’s Argentina’s.”

“People are saying this is a rug pull,” Davis said in a Sunday interview with YouTuber and cryptocurrency journalist Coffeezilla. “That’s not objectively true.”

‘Gambling’

Freddie New, head of policy at Bitcoin Policy UK, told The Epoch Times by email that he hoped the event would begin to accelerate a “broader acceptance of what Bitcoiners have been saying for years—that the vast majority of ‘crypto’ is utterly without merit and most akin to gambling than anything else.”

He said that “meme coins” no longer pretend to have any function or utility.

“They operate purely on vibes, and while some will make money from them, they are almost universally manipulated by insiders to the point that they should simply be considered as gambling, but gambling in an even riskier way than simply placing a bet,” he said.

He said LIBRA “may not technically have been a meme coin, but its price action, pump, and apparent manipulation appear to behave in the same way.”

New said that bitcoin is now being looked at “seriously by nation states as a pristine, neutral, and global asset” and “makes up more than 60 percent of the entire market cap of the space.”

The Epoch Times contacted Hayden Mark Davis’s company Kelsia for comment.

Bill Pan, Reuters, and The Associated Press contributed to this report.