Crypto Controversy Erupts as Libra Token Collapses
A crypto scandal unfolded late Friday night after Argentine President Javier Milei promoted a crypto fundraising platform. The Libra token, launched on Solana, saw its value surge past $4 billion before crashing, triggering an investor outcry and an internal government probe.
Pro-Crypto Figures Under Fire as Investors Lose Millions
Prominent investors, including Barstool Sports founder Dave Portnoy, suffered steep losses, calling the event the “biggest rug pull of all time.” Hayden Davis, the crypto entrepreneur behind Libra, initially benefited from the surge but later pledged to return profits to the market.
“The Libra saga is a travesty,” said Henry Elder of UTXO Management, criticizing the lack of ethical leadership in the crypto sector.
Milei Denies Ties as Crypto Backlash Mounts
Milei initially distanced himself from Libra, claiming it was a private initiative with no government affiliation. However, reports surfaced that he met with Davis in Buenos Aires, fueling speculation about his role in endorsing the token.
Political Fallout and Economic Implications
The Libra crash led to a 5.8% drop in Argentina’s S&P Merval Index, reflecting investor uncertainty. With Milei set to meet Donald Trump to discuss IMF funding and trade exemptions, the incident adds pressure to his pro-market economic agenda.
Crypto Market Reaction and Future Outlook
While Davis vowed to return profits, KIP Protocol—linked to the project—denied involvement, stating it had no role in the token launch. Meanwhile, the incident raises concerns about unregulated promotions and their impact on national economies.
Milei’s Approval and Long-Term Political Risks
Despite the controversy, Milei’s approval ratings remain near 47%, bolstered by declining inflation and economic growth. However, analysts warn that erratic decisions could undermine confidence in Argentina’s economic recovery.
“Macroeconomic balance needs to come along with emotional balance,” said Alejandro Catterberg of Poliarquia Consulting, highlighting the uncertainty surrounding Milei’s leadership style.