Aside from Trump and his cronies, we don’t often hear the democratically elected head of a sovereign country promoting cryptocurrencies, let alone memecoins, but that’s exactly what Argentina’s President Javier Milei did — and you can imagine the results. Just hours after he endorsed $LIBRA and promoted it, the currency's value plummeted 95% from its peak, leading to angry investors and even legal action.
Milais, known for his crypto-friendly stance, promoted $LIBRA on social media as a project dedicated to encouraging economic growth in Argentina by funding local small businesses. His posts on X acted as a catalyst, pushing the token’s market capitalization to a staggering peak of $4.5 billion.
However, the joy was short-lived. According to blockchain analytics firm Lookonchain, within hours of Millais’ endorsement, eight wallets associated with the $LIBRA team cashed out a whopping $107 million. This triggered a catastrophic plunge of 95% of the token’s market capitalization, with its value plummeting to $232 million.
As the dust settled on the incident, accusations of insiders "cutting leeks" began to become rampant. This term refers to developers cashing out after artificially inflating the value of tokens. This result is not surprising considering that an analysis company called "Bubblemaps" had earlier warned that 83% of the supply of LIBRA coins is concentrated in a few virtual currency wallets.
Faced with the backlash, Millay quickly deleted his endorsement posts and distanced himself from the project, denying any connection to it. His subsequent post clarifying his role was telling:
"I didn't know the details of the project, and after learning about it, I decided not to continue spreading it (which is why I deleted the tweet). I want to say to those politicians who want to use the opportunity to harm people. They prove every day how despicable politicians are, and it also makes us more determined to kick their asses."
Jupiter, the exchange that verified the coin, also tried to absolve itself of any wrongdoing. The exchange’s Kash Dhanda claimed that Jupiter had no involvement in the launch, deployment or marketing of $LIBRA.
Meanwhile, Julian Peh, CEO of KIP Protocol, a Web3 company associated with the project, strongly denied the accusations of "cutting leeks." Peh claimed that KIPProtocol’s involvement was limited to allocating funds to Argentinian companies and not as a token issuer or trading entity.
President Milley's situation worsened when a group of Argentinian lawyers escalated the matter with accusations of fraud. In a statement to The Associated Press, one of the plaintiffs, Jonatan Baldiviezo, accused Miley of being "part of an illegal organization that committed an unspecified amount of fraud." The case is expected to be handed over to a judge or prosecutor for further investigation.