Argentina’s Libra Crypto Scandal: Javier Milei Cleared, But Questions Remain

Argentina’s Libra Crypto Scandal: Javier Milei Cleared, But Questions Remain

The Rise and Fall of Libra Token

In February 2025, the Libra cryptocurrency, launched by Delaware-based Kelsier Ventures under the project “Viva La Libertad,” experienced a meteoric rise followed by a dramatic collapse. Promoted by Argentine President Javier Milei on his personal X account, the token surged from near-zero to $5 per unit within minutes, reaching a market capitalization of $4.5 billion. However, the excitement was short-lived. Founders controlling 70% of the token’s supply liquidated their holdings at peak prices, triggering an 85% crash and leaving investors with losses estimated between $100 million and $250 million.

Milei’s Role: Cleared of Ethical Violations

Argentina’s Anti-Corruption Office (OA) recently concluded its investigation into Milei’s involvement in the Libra scandal. The OA determined that Milei acted in a personal capacity when promoting the token and did not misuse public resources or violate federal ethics laws. According to the OA, Milei’s X account has functioned as a platform for personal and political expression since 2015, predating his presidency. The report emphasized that his endorsement of Libra was not connected to official government policy.

“Although the account sometimes references public policies or decisions from his administration, it does so in a non-institutional manner, functioning as a platform for political and personal expression,” the OA stated.

Ongoing Criminal Investigation

Despite the OA’s findings, a federal criminal investigation into the Libra scandal remains active. Authorities are examining whether Milei’s promotion of the token involved securities law violations or market manipulation. This investigation operates independently of the ethics review and could yield different conclusions.

Critics argue that the initial probe lacked thoroughness. Economist and opposition lawmaker Itai Hagman stated, “It was always a fake; they never dared to investigate anything at all, and they’re covering each other up because they’re completely up to their necks in it.”

Political Fallout and Public Trust

The Libra scandal has had significant political repercussions for Milei. Polling data from Zuban Córdoba in March 2025 revealed that the incident negatively impacted Milei’s approval rating, which dropped from 47.3% in November 2024 to 41.6% in March 2025. Many Argentinians expressed doubts about whether public figures should endorse cryptocurrencies, especially given the financial losses suffered by everyday investors.

Broader Implications for Argentina’s Crypto Ecosystem

Argentina has long been a hub for cryptocurrency adoption, driven by economic instability and distrust in traditional banking systems. In 2022, nearly 5 million Argentinians held digital assets as a hedge against inflation and currency devaluation. However, the Libra scandal has exposed vulnerabilities in the country’s crypto ecosystem, highlighting the need for stronger regulatory frameworks.

The challenge now is twofold: restoring public trust and building a healthier, more transparent crypto environment. While Milei’s hyper-liberal economic policies have championed deregulation, many Argentinians are calling for safeguards to protect investors from similar incidents in the future.

What’s Next for Libra and Milei?

The Libra controversy is far from over. Legal troubles continue to unfold, with a class-action lawsuit involving plaintiffs from Argentina, the United States, and the United Kingdom progressing through the courts. Additionally, Circle, the issuer of the USDC stablecoin, recently froze two wallets linked to Libra’s founders, holding over $58 million, following a U.S. court order.

For Milei, the scandal represents a critical test of his leadership and credibility. While the OA’s decision may provide temporary relief, the ongoing criminal investigation and public scrutiny ensure that the story is far from concluded. As Argentina navigates its crypto future, the Libra case serves as a cautionary tale about the risks of unregulated digital assets and the responsibilities of public figures in promoting them.