Argentine Federal Prosecutor Eduardo Taiano escalated the investigation into the Libra memecoin scandal by requesting the freeze of $110 million in proceeds tied to the controversial cryptocurrency. The move marks a significant step in unraveling a financial debacle that has ensnared thousands of investors and cast a shadow over President Javier Milei’s administration. The Solana-based token, which Milei briefly endorsed in February, soared to a $4.5 billion market cap before crashing over 90% within hours, sparking allegations of insider manipulation and fraud.
Taiano’s request, reported by local outlet Clarín, aims to secure digital wallets linked to the scandal and prevent the dispersal of funds. The prosecutor is also seeking to recover deleted social media posts, including Milei’s promotional X message from February 14, which touted Libra as a “private project” to boost Argentina’s economy by funding small businesses. That post, shared with his 3.8 million followers, triggered a buying frenzy—pushing the token’s value from near-zero to $4.97—before insiders allegedly cashed out $107 million, leaving retail investors with devastating losses.
The investigation, dubbed “Libragate” in Argentina, has identified at least eight wallets connected to the Libra team that profited before the collapse. Blockchain data from the Kobeissi Letter highlights the scale of the dump, while recent activity shows $4.5 million moved from a scandal-linked wallet to buy a memecoin called POPE, raising laundering suspicions. Taiano has called for detailed transaction records from February 14-15, when Libra’s trading volume peaked at $1.5 billion, and issued international requests for data from foreign crypto exchanges.
The scandal erupted when Milei, a libertarian economist elected in 2023, posted about Libra, only to delete the message five hours later, claiming ignorance of its details. “I didn’t promote it, I merely shared it,” he told Todo Noticias on February 17, likening investors to gamblers who “knew the risks.” His administration distanced itself, stating he had no role in the token’s creation and ordering an Anti-Corruption Office probe. Yet, critics argue his involvement lent credibility to what Argentina’s fintech chamber called a potential “rug pull”—a scam where insiders inflate a coin’s value before abandoning it.
Opposition lawmakers have seized on the controversy, filing over 100 fraud complaints and calling for Milei’s impeachment. Lawyer Jonatan Baldiviezo, among the plaintiffs, told the Associated Press, “Milei’s actions were essential” to the alleged fraud, pointing to the three-minute gap between Libra’s launch and his post as evidence of coordination. Observatorio del Derecho a la Ciudad estimates 40,000 people lost over $4 billion collectively, though Milei downplayed the impact, saying in a February interview, “Maybe four or five Argentinians lost money—the majority were Chinese and American volatility traders.”
The fallout has rippled beyond Argentina. International law firms like Burwick Law are preparing class-action lawsuits for affected investors from the U.S., Asia, and Europe. Max Burwick, the firm’s managing partner, said, “We’re investigating legal options,” noting the challenge of pinpointing jurisdiction. Meanwhile, key figures like Hayden Davis, CEO of Kelsier Ventures, which launched Libra, have faced scrutiny. Davis admitted to Coffeezilla on YouTube that he controlled $100 million in proceeds but insisted he wouldn’t profit personally, calling it an “experiment gone wrong.”
For Argentina’s crypto community, the scandal is a setback. Rodolfo Andragnes of Bitcoin Argentina NGO called it “a missed opportunity” for the industry, while Nansen’s report noted “trust erosion” after insiders profited and retail investors “got burned.” As Taiano’s probe deepens—requesting phone records and visitor logs from the presidential residence—the stakes are high. The frozen $110 million could offer restitution, but it also intensifies pressure on Milei, whose reform agenda now contends with a tarnished reputation ahead of midterm elections.
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