LIBRA Memecoin Collapse: Argentina’s Anti-Corruption Office Clears President Javier Milei

Key Takeaways

• Argentina’s anti-corruption bureau gave President Mile a clean chit in the Libra scandal.
• Circle has frozen $58 million in USDC linked to LIBRA.
• President Javier Milei and his sister failed to attend a court mediation.

The anti-corruption office in Argentina has given a clean chit to the country’s president, Javier Milei, concerning his promotion of the Libra memecoin.

LIBRA, a memecoin seen initially as an official Argentine cryptocurrency, has become one of the biggest scams in recent history, wiping out billions in investor funds.

The fallout has shaken both Argentina’s crypto market and its political scene, with President Javier Milei now at the heart of corruption allegations.

Milei, who ran on a platform to fight corruption, is under legal scrutiny and facing possible impeachment after promoting LIBRA on social media.

Opposition lawmakers argue that his endorsement misled investors, artificially boosting LIBRA’s market cap before insiders cashed out, leaving thousands with massive losses.

Latest Development

Anti-Corruption Office Gives Clean Chit to Milei

The Argentine anti-corruption office ruled that President Milei’s promotion of the cryptocurrency LIBRA, which crashed within hours of launch in February, did not violate any rules pertaining to public service ethics.

In a resolution released on Friday, the office exonerated Milei of any misconduct, stating that the president’s X post promoting the meme token was done in his personal capacity and “as an economist and not a public official.”

The clean chit from the agency would offer a window of relief for the president, who was under tremendous political pressure owing to an uproar and demand for a criminal investigation against him.

The anti-corruption office works within the Justice Ministry. The Milei administration appointed the current chief of the bureau in December 2023, raising more concerns about conflicts of interest.

After the president’s request, the office also started investigating Milei in the case, only to be dismissed within weeks, clearing the president of any wrongdoing.

Circle Freezes USDC Tied to LIBRA

Stablecoin issuer Circle has frozen approximately $57.65 million worth of USDC across two Solana wallets tied to the team behind the LIBRA.

The freeze followed a request from the U.S. District Court for the Southern District of New York.

“Yesterday, a federal court in SDNY entered a temporary restraining order at our request, Burwick Law, supported by Tim Treanor, freezing approximately 57.65 million USDC held at Circle, which you can now see confirmed on Solscan,” said the law firm.

According to Solana block explorer Solscan, the frozen wallets currently hold $44.59 million and $13.06 million in USDC, respectively.

President Milei Shuts Down LIBRA Investigation Task Force

Just a day after skipping a court hearing about the LIBRA memecoin scandal, Argentine President Javier Milei dissolved the task force investigating the multi-million dollar fraud.

The LIBRA case has become a major political flashpoint, with opposition leaders demanding a full investigation into Milei’s alleged involvement.

The president initially formed a special task force in February to probe the scandal, but his administration now says the unit has completed its work.

According to Decree 332/2025, co-signed by Justice Minister Mariano Cúneo Libarona, the government believes the task force has fulfilled its mandate and passed all relevant information to the Public Prosecutor’s Office.

“The Government considers that the information gathered has been forwarded to the Public Prosecutor’s Office and that the Unit has fulfilled the task assigned under Decree No. 114/25,” the decree states.

The announcement has sparked fresh criticism, with some questioning the decision to disband the unit so soon, particularly as the president himself failed to appear before the court this week.

President Milei Skips Civil Hearing

Argentine President Javier Milei and his sister Karina failed to appear at their first civil hearing regarding the ongoing LIBRA scandal.

During the session, a judge unsealed their bank records as part of the broader investigation into the controversial memecoin project.

According to local media , the judge has also ordered the Central Bank to lift bank secrecy protections on the president’s accounts. The move comes amid a wider probe into the alleged multi-million dollar fraud tied to LIBRA.

An Argentine federal judge has reportedly frozen assets linked to key figures involved in the project. Investigators are examining possible fraud and financial misconduct, including whether President Milei and his sister received funds connected to LIBRA’s promotion and operations.

Argentine Congress Backs Investigation Demand

On April 8, the Argentine Congress approved the creation of a panel to investigate the LIBRA cryptocurrency scandal, which President Milei heavily promoted.

The lower house of parliament voted 128-93 in favor of launching the investigation, which involved over $4.5 billion and left investors with nearly $250 million in losses.

Lawmakers also passed a motion requiring senior officials, including Justice Minister Mariano Cuneo Libarona and Economy Minister Luis Caputo, to testify about the scandal.

Milei’s Approval Rating Plunges

President Milei’s approval rating has reached its lowest point since taking office, with public trust eroding after the $4.6 billion LIBRA memecoin collapse.

A recent poll by Zuban Córdoba found that 57.6% of Argentinians disapprove of Milei, while only 36% continue to support him.

The remaining 6.4% remain undecided. The survey, conducted in March, polled 1,600 respondents, reflecting growing skepticism over the president’s handling of the crisis.

Another survey by the University of San Andrés, conducted between March 11 and 20 with 1,020 participants, reported Milei’s approval rating at 45%, further underscoring the decline in public confidence.

However, not all polls paint the same picture. According to Morning Consult’s data from February 27 to March 5, Milei’s approval rating remained relatively high at 62.4% despite the LIBRA scandal.

The disparity in polling figures highlights the uncertainty surrounding Milei’s political standing as Argentina grapples with the fallout from the crypto crisis.

Lawyer Demands Interpol Hunt

Argentine attorney Gregorio Dalbon has formally requested that Interpol issue a red notice for the arrest of Hayden Davis, citing his alleged role in the LIBRA memecoin collapse.

Dalbon accused Davis of being a key figure behind the failed project, which wiped out millions in investor funds. Prosecutors have already frozen nearly $100 million in crypto assets linked to the investigation. Davis’s legal team has not yet responded to the allegations.

The push for an Interpol red notice comes amid unverified reports that Davis may have taken his own life under mounting pressure from law enforcement and political figures.

While LIBRA memecoin collapsed within 24 hours of launch, investigators say those behind the scheme are still laundering funds . Insiders allegedly used low-market-cap memecoins in pump-and-dump schemes to cash out their gains.

Top Prosecutor Launches Investigation Into LIBRA

Federal prosecutor Eduardo Taiano has launched a criminal investigation into LIBRA—the probe centers on allegations of fraud, bribery, and influence peddling.

Authorities trace suspicious transactions, identify beneficiaries, and collect key digital evidence.

Taiano has specifically ordered a forensic reconstruction of financial activity on Feb. 14 and 15—the peak trading days for LIBRA—when the token saw a dramatic surge in volume.

The investigation aims to map out the full flow of funds linked to LIBRA since its inception and determine who profited from the scheme.

Prosecutors have also requested the recovery of deleted social media posts, including Milei’s now-removed Feb. 14 tweet endorsing the token.

The federal probe follows reports that the U.S. Department of Justice (DOJ) is investigating prominent figures tied to LIBRA.

Top U.S. regulators are also said to monitor potential financial misconduct related to the project.

LIBRA Crash Timeline

Milei’s Endorsement and the LIBRA Crash

Amid growing global interest in state-backed memecoins, Milei publicly promoted LIBRA on X, describing it as a private initiative to revitalize Argentina’s economy.

His now-deleted post, shared with over 3.8 million followers, included a direct link to the project, fueling speculation that LIBRA had official government backing.

Investor enthusiasm drove LIBRA’s market cap past $4.4 billion , but within hours, the token collapsed in what analysts now describe as a coordinated rug pull.

74,000 Traders Lose $286 Million

According to blockchain analytics , 74,000 traders collectively lost $286 million in the LIBRA crash.

At least 24 wallets suffered losses exceeding $1 million, while 61 addresses lost more than $500,000. One investor reportedly spent $5.6 million acquiring 2.1 million LIBRA tokens—only to sell them for just $430,000, marking a $5.17 million loss.

In a bizarre twist, blockchain analysts later discovered that this trader received $5 million in USDC as compensation, fueling speculation that he was an insider who mistimed his entry.

The trader in question? Barstool founder Dave Portnoy. The LIBRA team allegedly covered his losses, raising further concerns about coordinated fraud.

LIBRA Crash Deepens Altcoin Liquidity Crisis

LIBRA’s collapse from its all-time high has sent shockwaves through the broader cryptocurrency market, exacerbating the ongoing liquidity crunch in the altcoin sector.

Memecoins have a history of draining liquidity from altcoins, as each new viral token absorbs capital that might otherwise flow into more established projects.

While fresh capital occasionally enters the market, it is often controlled by insiders who dictate price movements before retail investors join in, shifting existing liquidity rather than expanding the total market.

A similar pattern played out when the TRUMP memecoin skyrocketed to a $75 billion market cap. Despite its meteoric rise, the overall crypto market cap remained unchanged, suggesting that capital was merely shifting between assets rather than growing.

The LIBRA token followed the same trend. As it climbed to $4.4 billion, it failed to bring in fresh liquidity to the market. However, when insiders cashed out in the rug pull, it triggered a liquidity drain, causing ripple effects across the broader altcoin sector.

LIBRA’s Creators and a Web of Insider Trading

As investigators unraveled the LIBRA scandal, they uncovered a disturbing pattern of fraud, insider trading, and ties to serial memecoin scammers.

On-chain analysts traced LIBRA’s token movements back to Arunkumar Sugadevan, an Indian developer linked to multiple fraudulent projects, including MELANIA, ENRON, and OG FUN.

One wallet associated with MELANIA’s creator had previously made $2.4 million by sniping tokens early. A related address connected to LIBRA’s launch later cashed out $87 million before sniping another $6 million in profits from the project.

LIBRA’s downfall mirrored past scams in which insiders collaborated with influencers and celebrities to pump memecoins before abruptly pulling liquidity.

In these schemes, public figures often denied involvement afterward, typically claiming their accounts had been hacked—a tactic infamously used in the Jenner memecoin scandal.

Amid the growing scrutiny, LIBRA’s promoters were identified as Kelsier Ventures and its CEO, Hayden Davis.

In an interview with investigative journalist Coffeezilla, Davis not only admitted to sniping LIBRA tokens but also inadvertently revealed details of similar celebrity-backed scams. He disclosed that President Milei promoted LIBRA not as a memecoin but as an investment scheme.

Davis further exposed a pay-to-promote operation in which several influencers were gifted millions in LIBRA in exchange for bullish posts, with no disclosure to their audiences. Additionally, Davis boasted that he traded on insider information and personally made over $100 million on LIBRA.

Beyond Davis’s admissions, the LIBRA collapse revealed a tangled web of insider trading involving key opinion leaders (KOLs), exchange platforms, and token launch teams.

According to decentralized exchange Jupiter, insiders were aware of LIBRA’s launch nearly a week before it went live. While Jupiter denied direct involvement in insider trading, its partner platform, Meteora, was at the center of controversy.

Meteora co-founder Ben Chow resigned on Tuesday , Feb. 18, after leaked messages exposed his role in coordinating multiple memecoin launches, including a $200 million extraction scheme.

Argentina’s Political Fallout

LIBRA’s implosion sparked a political crisis for President Milei, turning his once-fiery anti-corruption stance into a liability.

On Sunday, Feb. 16, Argentine attorneys filed criminal fraud charges against the president, accusing him of using his platform to promote a scam.

Legal filings argued that Milei directly influenced LIBRA’s rapid rise and fall, misleading investors into believing the token was a government-backed initiative.

The LIBRA scam has become a national-level debacle, as Argentina’s stock market plunged 6% at Monday’s opening.

Meanwhile, opposition lawmakers are pushing for impeachment proceedings, citing Milei’s involvement as a “national embarrassment” with international implications.

A Reuters report suggested that Congress may soon move forward with a formal impeachment trial.

In response, the Argentine Presidential Office called the Anti-Corruption Office to investigate whether Milei or any government officials engaged in wrongdoing.

The courts will now review evidence to determine whether individuals connected to LIBRA—including those behind the KIP Protocol—committed financial crimes.

With legal and political pressures mounting, Argentina faces uncertainty in its crypto sector and leadership.

CZ Steps In With Aid for Victims

Following the collapse, former Binance CEO Changpeng Zhao (CZ) donated 150 BNB (nearly $100,000) to assist some of the scam’s victims.

Zhao noted on X that he was following the lead of a university student who had started an initiative to help those affected.

While the donation was a fraction of the nearly $286 million lost, the gesture drew praise from the crypto community, with many calling on other industry leaders to step up.

Milei Doubles Down, Rugs Community Twice

In the wake of the collapse, Milei deleted his initial LIBRA promotions, only to reshare them after the scam had been exposed.

Rather than taking accountability, the president dismissed concerns, claiming he had merely “shared” the project, not promoted it.

“Did the state lose money? No. Did Argentinians lose money? Maybe four or five at most. The vast majority of investors are Chinese and American,” Milei said in an interview, downplaying the scandal.

“Those involved knew the risks very well—they were volatility traders. This is a private matter between individuals, and they participated voluntarily,” he added.

Kelsier Ventures Claims Ties to Argentine President Milei

The LIBRA memecoin scandal unravels, with new allegations linking Argentine President Javier Milei directly to the scheme.

In a message sent to media outlets, Hayden Davis, a key figure behind the fraudulent project, claimed to have financial leverage over Milei through payments to the president’s sister.

“I control that n****,” Davis allegedly wrote. “I send $$ to his sister, and he signs whatever I say and does what I want.”

The claims have fueled speculation, particularly after Milei abruptly ended an interview when pressed about the LIBRA controversy.

Observers now suspect his sister may have played a role in shutting down the discussion.

DOJ Investigates Prominent Figures Linked to LIBRA

The DOJ has reportedly opened an investigation into key figures who may have played a role in the LIBRA token scheme, according to Argentine news outlet La Nación.

Among those reportedly under scrutiny:

• Argentine President Javier Milei.
• Uniswap CEO Hayden Adams.
• KIP Protocol Co-Founder Julian Peh.

While still in its early phases, the DOJ inquiry may soon involve other U.S. regulators.

The FBI is said to be monitoring potential criminal activity related to the project, while the Department of Homeland Security (DHS) is looking into possible money laundering. The Securities and Exchange Commission (SEC) is also assessing whether LIBRA violated securities regulations, adding another layer of scrutiny to the case.