The Libra Incident: Examining Argentine President Javier Milei’s Confusing Token Endorsement and Its Destructive Aftermath

The latest crypto foray of Argentine President Javier Milei has left a trail of losses and disappointment behind, setting a negative precedent for the actions of leaders in the ecosystem. President Milei posted on social media information about Libra, a cryptocurrency project that was allegedly created to support small and medium enterprises (SMEs) in Argentina.

In a now-deleted post, Milei stated that the project was part of a liberal rise in the country and that it wanted to invest in the nation. He stated:

Liberal Argentina is growing. This private project will be dedicated to encouraging the growth of the Argentine economy, funding small Argentine businesses and startups. The world wants to invest in Argentina.

Read more: Milei Advocates for Crypto Independence: ‘Don’t Let States Take Over’

Expectedly, after this endorsement, Libra’s market cap swelled. Nonetheless, there was a problem: Libra had no token lock or vesting, and the liquidity was concentrated in a limited number of wallets. The price of the token, which shot upwards of $5 quickly went down, reaching sub-dollar numbers.

According to Look On Chain, a blockchain observation firm, there was rampant insider activity before the launch, with newly created wallets being funded just before the announcement to purchase Libra.

The organization found that at least 11 wallets were involved in these movements, making a profit of $43.8M by dumping Libra after the price rose.

In addition, wallets that were directly funded by the Libra team also started cashing out after the launch, removing liquidity and claiming fees. Look on Chain claims that these wallets profited over $107 million from these movements.

Milei then disavowed Libra, acknowledging that he had failed to do due diligence regarding the nature of the project. He deleted his endorsement post and stressed that Libra was a private initiative, and that he had no involvement in the token launch.

He declared:

I was not aware of the details of the project and after having become aware of it I decided not to continue spreading the word (that is why I deleted the tweet).

Kip Protocol, the company that was allegedly behind the project, reiterated that Milei had no direct involvement in the launch process of the token. It also said it was not in charge of the market-making activities for Libra, introducing yet another actor into the mix: Kelsier Ventures.

Kelsier Ventures, represented by Hayden Mark Davis, admitted that it was part of the token launch. In a video posted on social media, Davis explained that several people that were part of the launch process had gone “silent or nowhere to be found.”

In a subsequent release, Kelsier Ventures revealed that it had secured Milei’s support for the token, claiming that his support was ensured throughout the launch of Libra. However, Milei inadvertently pulled his support, affecting the performance of the token and contradicting his previous assurances, shielding him from any accountability.

While the situation is still confusing, Milei’s possible involvement in Libra’s launch might affect the future of his administration. Leandro Santoro, a member of the opposition coalition, has proposed to impeach the president after the event.

Quoted by Reuters, Santoro declared:

This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president.

The President’s Office has outright denied all involvement allegations, remarking that Milei’s Libra’s endorsement was a simple informative post, “just as it does every day with many entrepreneurs who want to launch a project in Argentina to create jobs and get investments.” This directly contradicts Davis’ claims of a secured endorsement.

In addition, Milei has ordered the anti-corruption office to investigate if there was wrongdoing in the government’s actions, including by Milei, linked to Libra. The president assembled a team that will conduct a separate probe to clarify the involvement of KIP Protocol and other companies in Libra’s launch.

“All information gathered during the investigation will be handed over to the courts to determine whether any of the companies or individuals linked to the KIP Protocol project committed a crime,” the office concluded.

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