The LIBRA memecoin scandal is unraveling with fresh controversies emerging regularly.
Javier Milei, the President of Argentina, finds himself in the midst of the turmoil with accusations of supporting the cryptocurrency preceding its abrupt downfall.
Despite Milei refuting claims of promoting the token, the aftermath has been harsh, with investors encountering substantial losses and the president facing legal actions for fraud and calls for impeachment.
Milei’s Explanation
As the scrutiny escalates, this incident raises significant concerns regarding political influences on cryptocurrency markets and the dangers associated with unregulated digital assets.
In his initial public statement post the Libra token controversy, now dubbed “Libragate” by local media, Milei conversed with Todo Noticias.
He mentioned,
“I did not endorse it. All I did was spread information.”
Chronology of Events
The Solana-based Libra [LIBRA] token from the Libertad project witnessed a remarkable surge, achieving a market cap of $4.56 billion on February 14th following Milei’s support on X (previously known as Twitter).
However, its value nosedived by 94% once the post was deleted, sparking allegations of a pump-and-dump tactic.
In defense of his actions, Milei asserted that he operated with “good intentions” and had “no secrets” but conceded that he must exercise greater caution going forward.
He acknowledged the necessity of delineating clearer boundaries for appropriate behavior and stressed that any fallout from the token’s launch should be dealt with exclusively by those directly involved.
He elaborated,
“The government has no role to play in this.”
Affected Parties
Milei dismissed worries regarding the 44,000 impacted investors, stating that the majority were likely automated bots and remarked,
“The maximum number of individuals affected might be around 5,000.”
He further stated,
“I can confidently say that the possibility of Argentines being affected is incredibly slim.”
Aftermath
María Servini, a federal judge in Buenos Aires, is probing fraud accusations against Milei concerning his alleged support for the token. The investigation follows numerous legal complaints filed by Argentine attorneys.
Meanwhile, Luis Caputo, the Economy Minister, attempted to downplay the situation. In an interview on February 17th with La Política Online (as per a translation by YouTube), he remarked:
“Cryptocurrencies represent a minute, negligible sector. It’s a realm understood by only a few specialists.”
Caputo also underlined the speculative aspect of the crypto domain, labeling many participants as “gamblers.”
LIBRA’s Price Movement
Unsurprisingly, the LIBRA token continues its downward trajectory, trading at $0.3265 presently following a 12.10% decline in the past 24 hours, as per DexScreener.
Consequently, as the saga evolves, apprehensions about regulatory oversight and investor losses heighten. This raises queries about responsibility and the broader implications of political endorsements within the cryptocurrency market.