What started as a presidential endorsement quickly spiraled unraveled into a full-scale disaster, leaving investors furious and raising serious legal and political questions. Now, few days after one of the biggest crypto scandals in recent history, the fallout continues.
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What happened?
If you’re just catching up, we’ve covered the details of the LIBRA token scandal is in this article.
Here’s a brief recap: Argentine President Javier Milei promoted the LIBRA token on social media, claiming that it was an initiative to fund Argentine’s small businesses and attract global investment. The token surged to a market cap of $4.5 billion – until insiders executed a rug pull, causing its value to crash by 90%.
Milei’s Defense: Denial, Deletion, and Political Fallout
As soon as LIBRA’s collapse began, Milei deleted his promotional posts and distanced himself from the project. He insisted he had no involvement in its operations and was unaware of any details. Instead of taking responsibility, he attacked his political adversaries, calling them “filthy rats” and accusing them of exploiting the situation for political gain.
Meanwhile, opposition leaders wasted no time calling for his impeachment. “The president’s involvement in this scam is a disgrace on an international scale”, said lawmaker Leandro Santoro. “We have no choice but to launch impeachment proceedings”.
Even more concerning for Milei, the scandal has attracted attention from US authorities. Since American investors were involved in LIBRA’s trading, legal experts say the FBI and Department of Justice could have jurisdiction to investigate and even press charges. If that happens, it could be the first time a sitting president faces legal trouble in another country over a crypto-related scandal.
Milei Continues To Distance Himself
Yesterday, in an interview with Todo Noticias, Milei doubled down on his defense, insisting that he had no financial ties to LIBRA and had just shared the information in “good faith”.
I didn’t promote it, I shared it… I acted in good faith and took a hit.
Milei also downplayed the scale of investor losses, dismissing reports that 44,000 people were affected. According to him, the number is “at most 5,000,” and nearly all were foreign investors:
Did the State lose money? No. Did Argentinians lose money? Maybe four or five at most. The vast majority of investors are Chinese and American.
When pressed on whether he regretted posting about LIBRA, he admitted the controversy had made him reconsider his online presence. However, he insisted the responsibility rested with those who created the project, not with him:
These are highly specialized individuals in this type of financial instrument. Those who got involved knew the risks very well – they are volatility traders. This is a private matter between individuals, and they participated voluntarily.
Hayen Davis’ Involvement
The political scandal isn’t the only fallout from LIBRA’s disaster. Blockchain tracking firms started to analyze the coin and found that several wallets connected to the token’s launch team managed to withdraw tens of millions of dollars before the price crash.
At the heart of the scandal is Hayden Davis, the CEO of Kelsier Ventures, who played a major role in launching LIBRA. In an interview, Davis admitted to sniping the token – buying up a large supply early and selling at peak prices – but claimed it was a common practice in the crypto world.
However, further investigation showed that Davis and his team were also behind other controversial meme tokens, including the MELANIA coin, which had a similar boom-and-bust cycle.
Adding to the suspicion, one of the wallets linked to the LIBRA contract was funded from an exchange that doesn’t require identity verification. This raises serious concerns about the legitimacy of the entire project. Was LIBRA ever meant to be a real token, or was it always just a quick money grab for those in the know?
Jupiter And Meteora Involvement
LIBRA’s development team set up liquidity pools on Meteora, further entangling the project in the growing scandal. This connection led to accusations that both Jupiter and Meteora engaged in insider trading. Jupiter quickly issued a statement denying any wrongdoing:
Despite this announcement, Meteora co-founder resigned. Other co-founder, co-founder, Meow, defended him while acknowledging flaws in judgment:
While I am 100% confident about Ben’s character, as a project lead he has also shown a lack of judgement and care about some of the core aspects of the project.
Even after stepping down, Chow insisted he never received LIBRA tokens or had insider knowledge about the project.
The Connection Between LIBRA and Other Tokens
LIBRA’s downfall has exposed a web of connections between different meme tokens that have been launching in recent months. Blockchain analysts found that the same group of wallets that profited from LIBRA also made millions from the MELANIA coin. In fact, transactions show that profits from MELANIA were funneled into the launch of LIBRA.
A report from Bubblemaps, a blockchain tracking firm, suggests that these insiders have been running a cycle of launching new meme tokens, hyping them up with celebrity endorsements, and then pulling their funds before the inevitable crash.
These revelations are particularly alarming given recent statements from Kanye West, who claimed he was approached to promote a fraudulent coin, suggesting that this scheme is far more widespread than previously thought.
This Is Not The End
Clearly, this story is far from over. More details are likely to emerge from upcoming interviews, regulatory investigations in Argentina and the U.S., and further blockchain analysis.
However, one thing is already clear: LIBRA is just the tip of the iceberg. Evidence suggests a broader network of insiders profiting from manipulated meme coins and orchestrated rug pulls. Some of the biggest crypto scandals in recent years may be connected to this group.
What’s even more troubling is that high-profile figures – potentially including world leaders – have unknowingly (or knowingly) lent credibility to these schemes. This raises pressing questions: Should politicians be allowed to endorse cryptocurrencies? And should they be held accountable when those endorsements lead to financial disaster?
For investors, the lesson is simple: A big name behind a crypto project doesn’t guarantee its legitimacy. The best approach remains to invest in established projects with real innovation – rather than chasing hype.
We also wrote about why chasing the hype might not be worth it in this article.
