A judge in Argentina has been tasked with leading an investigation into President Javier Milei’s relationship with the cryptocurrency $LIBRA, amid allegations of fraud.
On Monday, Federal Judge Maria Servini was randomly chosen to helm the probe, which will look into whether Milei acted illegally.
Some opposition politicians have warned that Milei could even face an impeachment trial, depending on the outcome.
The scandal erupted on Friday, when the $LIBRA cryptocurrency was launched. Milei used his social media account on X to promote the crypto coin, saying it was designed to spur “economic growth by funding small businesses and startups”.
Bolstered by such high-profile support, the cryptocurrency briefly hit $4bn in market capitalisation. But its value quickly started to tumble, prompting some to call it a hoax or scam.
As $LIBRA’s value made a nose dive, Milei deleted his post.
Critics questioned whether this was an example of a “rug pull” scam, where the initial investors drive the value up, only to withdraw their investments suddenly, leading to a swift collapse of the currency.
Victims of such schemes are generally left with worthless coins, while the architect of the scam carries away profits from the height of the cryptocurrency’s value.
By Saturday, Milei’s office issued a statement distancing the president from $LIBRA, emphasising he was not involved in the currency’s development.
The statement also explained that Milei made a habit of promoting business ventures, including the cryptocurrency’s developer KIP Protocol, as part of his free-market platform.
“The president shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina to create jobs and attract investments,” the president’s office said.
One anonymous government official told the Reuters news agency that if anyone is a victim of the cryptocurrency’s rapid rise and fall, it is Milei himself.
“The only one on the face of this earth who was cheated is Milei,” the official told Reuters. “Javier promotes private projects all the time and will continue to do so.”
Still, critics pointed out that the cryptocurrency was sold on a website named vivalalibertadproject.com, which uses Milei’s slogan, “Long Live Liberty!”
They accused Milei of being part of the cryptocurrency scheme.
Jonatan Baldiviezo, a lawyer and one of the plaintiffs in Monday’s case, told The Associated Press news agency that he holds Milei personally responsible.
“Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” Baldiviezo said.
Observatorio del Derecho a la Ciudad, a local nongovernmental organisation (NGO) that filed a lawsuit, also accused Milei of costing thousands of people their savings.
“We denounce Milei as being part of an illicit association that organized a scam with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with a loss of more than $4 billion,” the NGO said on its website.
Even Hayden Davis, one of the cryptocurrency’s developers, appeared to blame Milei for its sudden fall in value.
“Despite prior commitments, Milei and his team unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media,” Davis said in a video.
Experts say it is unlikely Milei will face an impeachment hearing over the scandal, but it could knock his economic credibility ahead of the 2025 midterm elections.
For his part, Milei blamed his political opponents for the uproar in a social media post late on Friday.
“This increases our conviction to kick them in the [a**],” he wrote.