Argentine President Javier Milei is facing significant political fallout after endorsing a cryptocurrency token that quickly skyrocketed in value before crashing, leading opposition lawmakers to threaten an impeachment trial. The token, $LIBRA, was promoted by Milei on social media late last Friday, sparking a surge in its price to nearly $5. However, within hours, the value plummeted to under $1, leaving many retail investors facing significant losses.
The sudden volatility of $LIBRA has led to accusations of a “rug pull,” a term used in the cryptocurrency industry to describe a situation where developers artificially inflate the value of a token before cashing out, leaving investors in the lurch. Argentina’s fintech chamber has acknowledged the possibility of fraudulent behavior behind the token’s rapid rise and fall. Opposition lawmakers, including Leandro Santoro, have condemned Milei’s involvement, calling for an impeachment trial to hold the president accountable for what they describe as an international embarrassment.
Santoro, a member of the opposition coalition, voiced frustration, saying, “This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president.” Milei, who has long been associated with libertarian policies and pro-market rhetoric, initially posted about $LIBRA on X, recommending it as a cryptocurrency initiative to support small businesses in Argentina. However, after the token’s collapse, he swiftly deleted the post, explaining that he had not been aware of the project’s details and had only supported it due to its purported positive intentions.
He claimed that once he became aware of the circumstances surrounding $LIBRA, he decided to withdraw his endorsement. The scandal has now escalated into a full-blown political crisis, with Milei attempting to distance himself from the token and its creators. While he maintains that he had no direct involvement in its development or launch, he has faced mounting criticism for publicly promoting a cryptocurrency that has been widely viewed as a speculative investment.
The incident is especially damaging given Milei’s international image as an economic reformer, with recent media appearances, including a significant speech at the World Economic Forum in Davos, solidifying his status among global capitalists. Amid the political turmoil, Hayden Davis, the entrepreneur behind $LIBRA, has tried to salvage the situation by announcing plans to return the profits he made from the token. Davis, who had previously claimed to be working closely with Milei’s team, has since been disavowed by the Argentine government.
In a statement, Milei’s office clarified that Davis had no official connection to the Argentine government or the president, despite earlier claims of collaboration. This controversy has intensified ahead of Milei’s planned visit to Washington, where he hopes to meet Donald Trump and secure U.S. support for Argentina’s financial future, including negotiations with the International Monetary Fund (IMF).
The cryptocurrency scandal threatens to overshadow these critical diplomatic talks, and political analysts are warning that it could damage Milei’s credibility at a time when his country is already struggling with economic instability. His approval ratings remain relatively strong, supported by economic improvements such as falling inflation and rising wages. However, the scandal has sparked concerns about the Argentine president’s impulsive decision-making and the potential consequences for his leadership. – By CryptoWire News Desk.