Cryptocurrency Threatens Future of Argentine President

Asharq Al-Awsat

17-02-2025

Argentine President Javier Milei could face an impeachment trial in Congress, opposition lawmakers said on Saturday, after the libertarian leader touted a cryptocurrency which crashed soon after.
Milei late on Friday posted on X recommending the little-known crypto coin $LIBRA, which soon after shot up to nearly $5 apiece.
Just hours later, the cryptocurrency plummeted to under $1, according to Reuters.
The impeachment drive against Milei is gaining serious momentum in Congress, with lawmakers demanding to know who profited from the token's rise and fall.
Argentina's fintech chamber acknowledged that the case could potentially be a 'rug pull,' in which the developers of a crypto token draw legitimate investments, pumping up the value, only to later dump their stake.
'This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president,' said lawmaker Leandro Santoro, a member of the opposition coalition.
Santoro said that Milei's endorsement created a financial trap, even if he was not directly involved.
The President's political opponents say the scandal had devastated investors as thousands who trusted him lost millions, while many made fortunes due to privileged information.
Later, Milei deleted the post on X, with local media saying the post had been up for a few hours on Friday night.
He later said he took down his post after becoming aware of the circumstances, and that he had no relation to the cryptocurrency.
'I was not aware of the details of the project and once I found out, I decided to not continue giving it publicity,' he said.
KIP Protocol, the company behind $LIBRA, affirmed that Javier was never involved in the project.
The company, which is backed by Animoca Ventures in Hong Kong, insisted that $LIBRA was a private enterprise with no ties to the Argentine government.
'President Milei was not and is not involved in the development of this project,' KIP Protocol said on X.
Just hours later, KIP revised its statement, saying that the launch and market-making were fully managed by Kelsier Ventures, a company led by Hayden Davis.
KIP denied controlling any tokens and claimed their role was strictly post-launch, providing tech infrastructure for AI-based projects.
The company also said their team had received threats after the scandal erupted.
Official Investigation to Try to Contain Crisis
Meanwhile, the Argentine presidency has announced an official investigation into LIBRA, as Milei desperately attempts to distance himself from the controversy.
In a statement released via X on Saturday night, the Office of the President confirmed that Milei met with KIP Protocol officials Mauricio Novelli and Julian Peh on October 19, 2024, where they presented their blockchain-based initiative, dubbed 'Viva la Libertad.'
According to the recorded meeting, the company's plan was to finance private ventures in Argentina using blockchain technology. Also present at the meeting was presidential spokesman Manuel Adorni.
On January 30, Javier met with Hayden Mark Davis at Casa Rosada, Argentina's presidential palace.
The statement clarified that Davis had no official connection to the Argentine government and was introduced by KIP Protocol as the project's technology provider.
Javier defended his endorsement of KIP Protocol, saying 'The President shared a post on his personal accounts announcing the launch of the KIP Protocol project, just as he does daily with many entrepreneurs who want to launch a project in Argentina to create jobs and get investments.'