$99 Million Crypto Scandal in Argentina
A major crypto scandal is unfolding in Argentina after researchers revealed that $99 million worth of cryptocurrency was withdrawn from the liquidity pool of $LIBRA, a token briefly endorsed by President Javier Milei. The situation has sparked widespread controversy, with blockchain analytics firms pointing to eight wallets linked to the token’s creator as the primary beneficiaries of the massive withdrawal.
What happened with $LIBRA?
- Milei’s endorsement: On Friday, President Javier Milei posted on X recommending the $LIBRA token, only to delete the post hours later and deny any connection to the cryptocurrency.
- Rapid rise and fall: Following Milei’s mention, the token’s value skyrocketed above $4.50 per coin, only to plummet within hours, leaving many investors at a loss.
- Suspicious withdrawals: Blockchain analysis by Chainalysis identified eight digital wallets that withdrew roughly $99 million worth of tokens from $LIBRA’s liquidity pool.
- Connection to the creator: Chainalysis could not confirm the owners of these wallets but noted that they received funds directly from $LIBRA’s creator.
Investigations and allegations
A federal judge has launched an investigation into the token’s launch and Milei’s involvement. The scandal has raised concerns about the role of politicians in cryptocurrency promotions and potential financial misconduct.
- Milei’s defense: The president has accused political rivals of using the incident to discredit him.
- Legal scrutiny: Investigators are analyzing whether the massive fund withdrawals were premeditated or part of a broader scheme.
The role of blockchain analytics firms
- Chainalysis findings: The firm reported that the on-chain activity strongly suggests a connection between the wallets that withdrew funds and the $LIBRA team.
- Nansen’s analysis: Another blockchain research firm, Nansen, estimated that wallets linked to the $LIBRA launch still hold around $87 million worth of assets.
- Market impact: Between Sunday and Tuesday, approximately 70% of wallets trading $LIBRA suffered financial losses.
Key players and their statements
Hayden Davis and the $100M Custody
- Who is Hayden Davis? Davis, formerly listed as CEO of Kelsier Ventures, described himself as a “launch advisor” for $LIBRA.
- Funds under his control: In a public statement, Davis claimed to have as much as $100 million in crypto from the $LIBRA marketplace, which he intends to “reinvest.”
- Denial of wrongdoing: In an interview with crypto YouTuber Coffeezilla, Davis insisted that $LIBRA was not a rug-pull scam but rather a “plan gone miserably wrong.” He asserted that he never intended to personally benefit from the funds.
Political and financial implications
Meme coins like $LIBRA are known for their volatility, but their involvement with politicians is relatively rare. The incident draws parallels with other high-profile crypto controversies and raises ethical concerns about leaders endorsing financial assets without accountability.
- Political damage: The scandal could tarnish Milei’s reputation and credibility.
- Regulatory concerns: The case may prompt Argentina and other governments to impose stricter regulations on political figures engaging with cryptocurrency markets.
Final thoughts
The $LIBRA token collapse serves as a stark reminder of the risks associated with speculative crypto investments—especially when political endorsements are involved. With an ongoing federal investigation and millions still at stake, the full impact of this scandal remains to be seen.
