Javier Milei Faces Backlash Over Crypto Token Libra Collapse
Argentine President Javier Milei is at the center of a financial controversy following his promotion of the cryptocurrency token $LIBRA. Initially touted as a potential economic booster, the token’s dramatic rise and subsequent crash have left investors reeling from significant losses.
The Rise and Fall of $LIBRA
On Friday night, Milei took to social media platform X (formerly Twitter) to endorse $LIBRA, portraying it as a promising asset for Argentina’s economy and small businesses. The endorsement sparked a massive rally, pushing the token’s market capitalization to a staggering $4.5 billion. However, within hours, the token’s value nosedived by over 90%, wiping out more than $4 billion in market capitalization. Reports from blockchain analysis firms Kobeissi Letter and Bubblemaps revealed that insiders offloaded $87.4 million worth of tokens, intensifying the collapse.
Political Fallout and Allegations
The incident has ignited fierce political opposition. Former President Cristina Fernández de Kirchner has accused Milei of misleading investors, arguing that while ordinary traders suffered heavy losses, a select group profited from insider dealings. Opposition legislators have gone as far as calling for Milei’s impeachment, citing potential fraud and misconduct.
Milei’s Defense and Government Probe
Under mounting pressure, Milei deleted his initial post endorsing $LIBRA and announced a formal investigation into the matter. He claimed he was unaware of the token’s specifics and withdrew his support after learning more. The government has since launched an inquiry through the Anti-Corruption Office and formed a special investigative unit within the presidency to examine the circumstances surrounding the token’s collapse.
KIP Protocol and Animoca Ventures Connection
The controversial token is linked to KIP Protocol, a Web3 AI infrastructure firm. KIP Protocol has received strategic investment from Animoca Ventures, a major player in the blockchain and Web3 space. Despite these connections, KIP Protocol has denied Milei’s involvement in the token’s development, seeking to distance itself from the scandal.
Investor Fallout and Market Concerns
The financial toll on investors has been severe. Blockchain data shows that at least 24 wallet addresses recorded losses exceeding $1 million each, with the largest individual loss reaching $5.17 million. Concerns over the token’s centralization have also surfaced, as 82% of $LIBRA’s supply was concentrated in a handful of wallets, fueling speculation of a potential “rug pull” scheme.
As the investigation unfolds, the incident raises broader concerns about political figures endorsing volatile crypto assets and the regulatory gaps that allow such situations to occur. With Argentina’s economic landscape already fragile, the fallout from $LIBRA’s collapse could have lasting repercussions on both Milei’s administration and the nation’s financial sector.