Argentine President Javier Milei is facing criminal accusations and potential impeachment following the collapse of the LIBRA cryptocurrency, which he endorsed as a means to support small businesses.
Following a social media post from Milei promoting the crypto token, LIBRA briefly surged to a market capitalization of approximately $4.5 billion, only to plummet over 90% within hours, leading to accusations of a possible “rug pull” or “pump-and-dump” scheme by the president.
Critics, including economists and opposition leaders, suggest that Milei’s actions may amount to negligence or participation in a ‘rug pull’ scheme, where developers profit at the expense of investors.
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Argentina’s stock market experienced a dramatic decline of over 5% during Monday trading, with $LIBRA plummeting from $12.45 to $9.87 within an hour, leading to significant panic selling and the liquidation of over $50 million in long positions.
An official probe is being conducted by Argentina’s Anti-Corruption Office to determine if any misconduct or fraud occurred, on the grounds that Milei’s actions contributed significantly to the project’s collapse. Over 100 lawsuits have been filed against him, with accusations ranging from illegal association to fraud, claiming that more than 40,000 individuals were affected and losses exceeded $4 billion.
The investigation will assess all links between Milei, KIP Protocol (a Web3 company hired to distribute project funds to businesses in Argentina), and the cryptocurrency’s launch to determine potential legal violations.
Opposition lawmakers, led by Leandro Santoro, have also called for impeachment proceedings, arguing that Milei’s endorsement constituted an abuse of public trust.
Following the fallout, Milei deleted his post and claimed to be unaware of the project’s risks, framing his actions as support for innovation. In an interview on Tuesday, he denied responsibility for any losses sustained by LIBRA investors, comparing them to money lost while gambling at a casino.
However, prosecutors are still investigating potential fraud and misconduct related to his involvement, and analysts suggest that while the opposition may struggle to secure votes for impeachment, the scandal could severely impact Milei’s political standing ahead of the mid-term elections.
The controversy has raised significant questions about accountability and transparency in Argentina’s cryptocurrency dealings.
Connor Walcott is the lead writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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