A scandal dubbed ‘cryptogate’ is emerging in Argentina, involving President Javier Milei and the failed ‘$Libra’ cryptocurrency, which promised to support small businesses. After an initial surge, the currency’s value plummeted, resulting in significant losses for nearly 50,000 investors. Critics allege it resembles a pyramid scheme. Milei has denied promoting the investment, claiming ignorance of its details. The matter is under investigation, with potential legal repercussions and calls for parliamentary inquiries into the incident.
Argentina’s Rising ‘Cryptogate’ Controversy
In Argentina, a significant scandal is gaining traction and rallying opposition parties. The controversy is centered around President Javier Milei, who finds himself embroiled in what is now referred to as ‘cryptogate’. This situation touches on sensitive issues at the highest levels of government.
The $Libra Cryptocurrency Debacle
On February 14, the outspoken leader took to his X account to share an exuberant message: “The liberal Argentina is growing!!!” He was promoting a cryptocurrency called ‘$Libra’, which aims to boost the development of small and medium-sized enterprises (SMEs). Milei encouraged Argentinians to explore this investment opportunity, directing them to the project’s official website.
However, this venture quickly turned sour for many. While the initial hype caused a spike in the cryptocurrency’s value, it soon crashed dramatically, leaving nearly 50,000 investors facing significant losses. Spanish economist Eduardo Garzon sharply criticized the situation, stating, “Only nine people made $87 million (83 million euros), while 44,000 others lost everything they wagered […] It’s a full-fledged pyramid scheme, promoted by Javier Milei.”
The president’s promotional post was deleted shortly after it was shared, followed by a subsequent message in which he expressed regret. “I did not know the details of the project and after learning about them, I decided not to continue promoting it,” he stated, asserting that he had “obviously no link” to the private company behind ‘$Libra’.
Milei has consistently denied encouraging investment in the cryptocurrency, asserting, “I did not recommend, I did not promote, I disseminated.” He maintains that he acted in good faith and within legal bounds. Additionally, he has contested the reported number of victims, suggesting that only about 5,000 investors experienced losses, describing them as “high volatility traders” aware of the risks involved.
This defense may soon be tested in court, as an Argentine federal judge and prosecutor are currently addressing a multitude of complaints—reportedly over a hundred. Furthermore, a law firm representing approximately forty investors, primarily from Argentina, has submitted a request for investigation to the U.S. Department of Justice.
In response to the escalating situation, the Argentine presidency announced it would refer the matter to the Anti-Corruption Office to investigate any potential misconduct by government officials, including President Milei. While the presidency insists that Milei “did not participate in the development” of $LIBRA, it has also initiated a separate inquiry into the cryptocurrency’s launch and the parties involved.
Javier Milei acknowledged feeling “a slap” from the $LIBRA incident, realizing the need to “raise the walls” around him to shield himself from unscrupulous entrepreneurs. Politically, this controversy could have dire consequences for him. Opposition lawmakers have accused him of engaging in a “crypto-scam” and are contemplating the initiation of impeachment proceedings in Congress. Although some observers view this threat as unlikely, given the two-thirds majority needed in the lower house, political scientist Carlos Germano stated there is “zero chance” of such proceedings succeeding. Meanwhile, some cautious parties are advocating for a parliamentary inquiry to fully explore the ramifications of this unfolding affair.