Argentine Prosecutor Seeks to Freeze $110M in LIBRA Scam Tied to Milei

The LIBRA Controversy

The controversy erupted on February 14, 2025, when President Javier Milei endorsed the LIBRA cryptocurrency on his social media, describing it as a private initiative to support Argentina’s economy and small businesses. Following his endorsement, LIBRA’s price skyrocketed from $0.000001 to $5.20 within 40 minutes.

However, the surge was short-lived. Major holders, controlling 70% of the total supply, dumped their holdings, triggering an 85% crash in a matter of hours. This led to allegations of a “rug pull” – a scheme in which developers or insiders suddenly liquidate their positions, leaving investors with near-worthless tokens.

Legal Actions and Asset Freezes

In response, Prosecutor Taiano has requested to freeze digital wallets linked to LIBRA, preventing further dissipation of funds. He also seeks to recover deleted social media posts, including those from President Milei, to reconstruct the timeline of events.

Investigators are focusing on all LIBRA transactions from February 14-15, aiming to track the flow of funds and identify key beneficiaries of the suspected fraud. Authorities are also reaching out to international cryptocurrency exchanges for records related to LIBRA, emphasizing the global nature of the case.

Political Fallout and Investigations

The scandal has led to significant political backlash. Opposition parties are demanding Milei’s impeachment, and over 100 criminal complaints accusing him of fraud have been filed, many by political opponents.

Within 48 hours of his promotional tweet, 112 legal complaints reached Argentina’s Supreme Court. In response, Milei ordered an internal investigation through the Anti-Corruption Bureau to determine if any officials engaged in misconduct. A special “Unit for Investigation Tasks” has also been formed to scrutinize the LIBRA project.

International Legal Actions

The scandal has attracted attention beyond Argentina. International law firms, including Burwick Law, are preparing class-action lawsuits on behalf of foreign investors who suffered heavy losses. These legal actions argue that Milei’s promotion of LIBRA misled investors into making risky financial decisions.

Additionally, an Argentine law firm operating in the U.S. has filed complaints with the Department of Justice and the FBI against Milei and others allegedly involved. This highlights the international legal complexities that may emerge from the case.

Impact on Investors and the Crypto Market

An estimated 44,000 investors have been affected, with losses reaching $250 million. Meanwhile, nine founding accounts of LIBRA reportedly profited by around $87 million, raising concerns about insider trading and transparency in the crypto sector.

Despite the scandal, the overall memecoin market saw a 5% surge, with total capitalization nearing $62 million. This reflects the volatile and speculative nature of the cryptocurrency market.

Looking Ahead

The LIBRA case serves as a major warning about the risks of cryptocurrency investments, particularly those that lack regulation and transparency. It also highlights the challenges regulators face in policing the fast-moving digital asset industry.

The outcome of the investigation and legal proceedings could have major implications for Argentina’s political landscape and cryptocurrency regulation. For now, all eyes are on the authorities as they work to unravel the LIBRA debacle and determine accountability for the alleged fraud.