Argentine Politician Faces Fraud Allegations Over Cryptocurrency Scheme
Accusations of Betrayal
Argentinean lawyers filed a criminal fraud complaint against congressman Javier Milei on Sunday, accusing him of promoting a cryptocurrency on social media hours before its value plummeted, according to a lawyer who spoke to The Associated Press.
"Fraud was committed within this illicit association, where the actions of the congressman were essential," said attorney Jonatan Baldiviezo. A judge is expected to be assigned to the case on Monday, and it will be sent to a prosecutor for further investigation.
The Alleged Scheme
On Friday, Milei published a post on Twitter promoting $LIBRA, a digital token he claimed aimed to boost economic growth by financing small businesses and start-ups. Within hours, he deleted the post and the currency’s value nosedived. Investors lost millions of dollars, according to financial website Dexscreener.
Javier Smaldone, an expert in cryptocurrencies, described the cryptocurrency as a "rug pull," a common type of scam in the crypto industry. In a rug pull, creators hype a new cryptocurrency to attract investors. Once the currency’s value rises significantly, the major holders sell their shares, causing the currency to collapse. According to Smaldone, the process took about two hours in the case of $LIBRA.
"The profit was around $107 million," the computer scientist told Agence France-Presse.
Government Response
Following the currency’s collapse, Argentina’s presidential office announced that Milei had contacted the Anti-Corruption Office (OA) to investigate whether any government official, including the president, had acted improperly. The OA confirmed that Milei was not involved in the cryptocurrency’s development. A special unit within the OA will investigate the creation of the cryptocurrency and all companies and individuals involved.
Political Backlash
The opposition has sharply criticized Milei’s involvement. Former President Cristina Kirchner called him a "crypto scammer" on Twitter. Senator Martín Lousteau of the centrist UCR party pointed out that this was the second time Milei had promoted a cryptocurrency that turned out to be a fraud.
Milei’s Defense
Milei has denied any involvement in the alleged scheme, stating through his press office that he had only "shared a post of a third party." He argued that he had no knowledge of the cryptocurrency’s value fluctuations.
Milei, a libertarian economist known for his outspoken views, has dismissed the allegations as politically motivated attempts to damage his reputation.
Ongoing Investigation
The criminal complaint and the OA’s investigation are ongoing. The outcome could have significant implications for Milei’s political career and for the broader regulation of cryptocurrencies in Argentina.
