A cryptocurrency promoted by Javier Milei on February 14 surged and then collapsed within hours, turning a presidential social-media post into a political and legal crisis. Milei posted about the $LIBRA token on X, then removed the message and denied any connection to running the project. Buyers who entered after the surge faced steep losses. The crucial unanswered question was how a token presented as a way to finance Argentine entrepreneurs had been organised and who benefited from its short life at a high price.
The Buenos Aires Herald's reconstruction said Milei's post included the token's identifying contract number, making a newly created asset easy to find. It described a rapid rise followed by an equally rapid reversal as early holders sold. Reuters subsequently reported that a federal judge was investigating the launch and Milei's involvement. An investigation establishes that allegations warranted examination; it does not establish that the president committed a crime.
Money moved, identities remained uncertain
Reuters reported blockchain analysis by Chainalysis indicating that eight wallets which had received tokens directly from $LIBRA's creator withdrew cryptocurrency worth roughly US$99 million from the token's liquidity pool. Chainalysis could not identify the wallets' owners or say precisely when those withdrawals took place. The distinction matters: tracing transfers to creator-linked wallets is not the same as proving who controlled them or assigning criminal responsibility for the price collapse.
The same Reuters account cited Nansen's assessment that 70 percent of wallets trading $LIBRA between Sunday and Tuesday lost money. These are measures of wallets and on-chain activity, not a verified tally of individual victims or their aggregate losses. Reuters reported that Hayden Davis, who called himself a launch adviser, said he controlled as much as US$100 million of crypto from the marketplace, denied taking it for personal benefit and disputed that the launch was a deliberate rug-pull. His explanation was a defence offered by someone involved, not a finding by investigators.
Supporters of the president could point to his denial that he operated the venture. Opponents asked why the president publicised an obscure, volatile asset in the first place and called for scrutiny of any connection between its organisers and officials. Those questions were especially potent in a country whose government was seeking to persuade lenders and investors that it was restoring predictable economic rules. A presidential endorsement, or even the appearance of one, can move markets faster than a warning can follow it.
A governance test as well as a crypto story
The structure of a liquidity pool helps explain the controversy. Buyers need tokens and a reserve of other crypto assets to trade. When assets are removed from that pool, trading conditions can change rapidly and late entrants can be exposed to a violent price reversal. None of that alone proves fraud. It does, however, make the origins of the tokens, the identity of early holders and the sequence of posts and sales indispensable to a fair investigation.
At this stage the federal inquiry had to establish facts that public wallet data could not settle: who authorised the launch, who controlled the relevant wallets and what Milei knew before his post. The government faced a separate political challenge regardless of legal findings. Its case for freer markets depended partly on public confidence that senior officials would not lend state authority to opaque financial promotions. The episode ensured that trust, rather than just the token's price, would be under examination.
