Argentine president faces cryptocurrency scandal, impeachment threat
Argentine President Javier Milei has so far received positive feedback for his economic policies, which have led to a fall in inflation and an improvement in the country’s economic situation. However, over the weekend he faced a serious controversy that could threaten his mandate. A number of investors lost significant funds due to the promotion of an unknown cryptocurrency that collapsed shortly afterwards. The opposition is now calling for his removal.
It all started on Friday night when Milei promoted the cryptocurrency $LIBRA on the social network X, where he has nearly 3.8 million followers. In his post, he described it as a private project that should contribute to the growth of the Argentine economy. This statement caused a sharp rise in the value of the cryptocurrency, which shot from insignificant to almost five dollars a piece in a short while. Many investors, who saw the president’s support as an official guarantee, therefore decided to invest in $LIBRA.
Just a few hours later, however, there was a massive sell-off, which led to the price falling below one dollar. Thousands of investors suffered huge financial losses. According to analysts, however, some people profited greatly from the situation – several cryptocurrency wallets saw unexpected growth, with the largest one reportedly earning $87 million. Total insider profits are estimated at $107 million, or approximately $2.6 billion. Milei deleted his original post shortly after it was published, and in a subsequent statement said he had no ties to the project. He admitted that he did not know its details, and when he found out about them, he decided to end the promotion. The following day, the President’s Office announced the launch of an investigation and the involvement of the Anti-Corruption Bureau to determine whether any member of the government, including the President himself, had engaged in improper conduct. The opposition, however, did not react favourably to this move and began taking steps to impeach him. MEP Leandro Santoro described the situation as an international disgrace and called for the process of impeaching the President to begin.
Similar situations where politicians promote cryptocurrencies are not unique in international politics. For example, former US President Donald Trump launched his own cryptocurrency $TRUMP after his inauguration in 2024. This has rocketed in its two days of existence, with its price increasing by more than 800% and its total market value reaching up to $12 billion. However, a decline followed later on and today the price of this cryptocurrency stands at $17.5 a piece. There has been speculation that the $LIBRA cryptocurrency may have undergone a ‘rug pull’, an illegal practice whereby the creators of a cryptocurrency sell most of their tokens after a sharp rise in value, causing it to crash and leaving retail investors at a disadvantage. According to experts, this unfair manipulation is highly likely to have occurred. The Argentine Fintech Chamber has also admitted this possibility.
Javier Milei has thus found himself in an unexpected crisis that could significantly damage his popularity and political career. Yet he has been celebrating successes until recently, when he managed to reduce Argentine inflation to its lowest level in five years.
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