A federal judge in Argentina has been assigned to investigate allegations against President Javier Milei following his promotion of a cryptocurrency that suffered a rapid collapse.
The case, which has drawn widespread attention, has been described by Argentina’s fintech industry as potentially resembling a “rug pull” – a form of financial scam in which a digital asset’s developers lure investors before abruptly withdrawing funds, rendering the asset worthless.
The scandal erupted after Milei posted on social media platform X recommending the little-known cryptocurrency $LIBRA. Soon after, the token’s value plummeted, leading to significant losses for investors. Following the backlash, Milei deleted the post and denied any personal involvement with the cryptocurrency. Nevertheless, opposition lawmakers have suggested that he could face impeachment proceedings in Congress over the matter.
Judge Maria Servini Assigned to Case
Veteran Federal Judge Maria Servini has been assigned to oversee the case, following reports that more than 100 complaints had been filed with the judiciary regarding Milei’s involvement with the digital asset. The allocation of the case was done through a random selection process.
Meanwhile, Argentina’s S&P Merval stock index reacted negatively to the controversy, falling nearly 4% in Monday trading after an initial drop of almost 6%. Market analysts pointed to concerns over political instability and investor uncertainty following the scandal.
Crypto Platform Meteora Distances Itself
The $LIBRA token was launched on the Meteora cryptocurrency exchange, the same platform that had previously introduced the $Trump meme coin in January. That token similarly experienced a sharp surge and subsequent decline, resulting in estimated losses for around 200,000 crypto wallets.
In response to the growing scrutiny, Meteora co-founder Ben Chow stated on X that his firm was not responsible for deploying, managing, or marketing the $LIBRA token. He added that Meteora had “never had any access to the tokens or to Milei.” Chow later clarified that Meteora’s role was limited to providing technical support, including verifying the authenticity of the token after it had already been launched.
Political and Public Reactions
Although opposition lawmakers have floated the possibility of impeachment, analysts suggest it is unlikely to succeed, given the parliamentary arithmetic. However, the controversy could become a significant challenge for Milei as his government approaches mid-term elections later this year.
Some investors who lost money in the crash expressed anger on social media, blaming the Argentine president for promoting the cryptocurrency. Others, including Milei’s supporters, dismissed the accusations as politically motivated attacks aimed at undermining his administration.
ONG Bitcoin Argentina, a non-profit organisation that promotes cryptocurrency education, issued a statement criticising the incident. “Irresponsible promotion of assets puts thousands of people at risk,” the group said, calling for greater transparency and awareness in the sector.
Milei Responds
Milei himself has rejected accusations of wrongdoing and framed the controversy as a political attack. In a post on X, he lashed out at his critics, stating:
“To the filthy rats of the political caste who want to take advantage of this situation to do harm, I want to say that they confirm every day how vile politicians are, and this increases our conviction to kick them in the ass.”
The ongoing investigation will now determine whether there is any legal basis for the accusations against Milei.
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