Libra Scandal: Milei’s Support Sparks $4.5B Crypto Collapse
In February 2025, Argentine President Javier Milei became embroiled in controversy after his social media promotion of a cryptocurrency called $Libra. What began as a seemingly straightforward endorsement quickly spiraled into a political and financial scandal, raising questions about the president’s judgment and responsibility in the digital age.
The Rise and Fall of $Libra
On Valentine’s Day, Milei surprised his social media followers by endorsing a new cryptocurrency called $Libra. In his post, he highlighted it as a promising initiative to empower small Argentine businesses. Almost immediately, $Libra gained traction, with its market capitalization surging to an impressive $4.5 billion.
But this meteoric rise came to a crashing halt within days. Major investors pulled approximately $90 million from the project, causing the cryptocurrency’s value to plummet. Thousands of small-scale investors were left bearing the brunt of the losses, sparking outrage and demands for accountability from the president.
Milei’s Response: Damage Control or Denial?
After the collapse of $Libra, Milei removed his initial post and issued a statement distancing himself from the project. He claimed he was unaware of the intricacies of the cryptocurrency and had merely shared information in good faith. This explanation, however, failed to appease critics. Many argued that as the president, he had a duty to carefully vet any project he publicly supported, especially one tied to financial markets.
The backlash was swift and severe. Opposition leaders accused Milei of negligence and demanded a formal investigation. Some even suggested the possibility of impeachment, citing the incident as evidence of a broader lack of responsibility in his administration.
The Investigation: Links to the Project’s Creators
As the scandal deepened, an investigation was launched to determine the extent of Milei’s involvement. One of the key figures behind $Libra, Hayden Mark Davis, alleged that he had met with Milei and had connections to the president through his sister, Karina Milei. While no concrete evidence has emerged to substantiate these claims, the allegations alone have cast a shadow over the president’s leadership.
Transparency advocates have called for greater oversight of public officials’ interactions with private enterprises, especially in the volatile world of cryptocurrency. The case of $Libra has become a cautionary tale, underscoring the risks of mixing politics with speculative financial ventures.
The Broader Impact on Argentina
The $Libra scandal has not only shaken confidence in President Milei but also sent ripples through Argentina’s economy. Following the cryptocurrency’s collapse, the Argentine stock market saw a modest dip, with its main index falling by 0.6%. While financial analysts believe the long-term economic impact will be limited, the incident has highlighted vulnerabilities in the country’s regulatory framework.
Investors and citizens alike are now calling for stricter controls on financial endorsements by public figures, emphasizing the need for accountability in a digital world where a single social media post can have far-reaching consequences.
Conclusion
The fallout from the $Libra controversy offers several key takeaways for political leaders and citizens alike. For leaders, it serves as a reminder of the immense responsibility that comes with public endorsements, particularly in an era where digital assets can rise and fall in the blink of an eye. For the public, it underscores the importance of due diligence and caution when investing in speculative ventures.
As President Milei navigates the political and reputational damage caused by this scandal, one thing is clear: transparency and accountability must be at the forefront of leadership in a rapidly changing world. The $Libra saga is a stark example of what happens when financial innovation intersects with political influence—and the stakes couldn’t be higher.