$Libra Crypto-Scandal Raises Corruption Allegations Against Javier Milei Administration In Argentina
Hayden Mark Davis, the mastermind of the $Libra crypto-scandal, and Milei, the participant.
The insiders who traded the $LIBRA token with privileged information have been moving funds for at least two months. Phase two of the scam was underway essentially the day after they 'pulled the rug' on the $Libra memecoin.
Digital wallets associated to Kelsier Ventures and its now-infamous CEO, Hayden Mark Davis, have been spotted moving millions of dollars across the cryptocurrency ecosystem in what appears to be a series of transactions aimed at covering their tracks and extracting payment. They are also associated to multiple other dodgy crypto operations involving memecoin launches, most notably the $Melania coin. This is one of the beauties of the blockchain, which is ultimately a public ledger where every transaction is visible. Yet that doesn't mean that it is easy to track the ultimate beneficiaries of the funds – whether it is members of the Davis clan, other crypto insiders or Argentine nationals.
The usual suspects surface if one looks at the characters who interacted with Davis during his visit to Argentina: Mauricio Novelli, Manuel Terrones Godoy, and Sergio Morales. They were the ones who organized the Tech Forum, a B-level crypto conference sponsored by the government which counted on the presence of President Javier Milei. Novelli, Godoy, and Morales — who has direct ties to Presidential Chief-of-Staff Karina Milei, the head of state's sister — even got Hayden's Kelsier Ventures to cough up cash in order to sponsor their conference, around $500,000, according to some sources, along with other foreign players such as Julien Peh's KIP Protocol and Bartosz Lipinski's Cube Exchange. These three firms are said to have signed differing levels of agreements with the Argentine government through which the future of blockchain, Web3 and artificial intelligence products in the country would be conducted and channeled by these players, all of which are considered to be secondary actors in the space. Hayden's brother Gideon admitted in a podcast interview (that was successively deleted and then uploaded again) that they had advised Cube and managed to get Milei himself to sign a Letter of Intent (LOI) to lead those initiatives on behalf of the government. La Nación's investigative journalist Hugo Alconada Mon reported that Kelsier's deal included an initial payment worth $300,000, followed by monthly installments worth $250,000 for the following six months, with a potential extension for another two-and-a-half years if they secured deals worth $10 million or more for the country. None of these contracts have made it into the public sphere, yet.
Hayden and the rest of the involved parties have gone voluntarily mute. After essentially threatening President Milei, by giving him a 48-hour deadline before liquidating the funds, the CEO of Kelsier Ventures asked the head of state's entourage to reach out to him, indicating that someone from Presidential Spokesperson Manuel Adorni's office was expected to get in touch. Indeed, Adorni joined the President in his February trip to the United States to participate in the Conservative Political Action Conference (CPAC), an unusual invitation if compared to previous trips.
Star political advisor Santiago Caputo, the freelancer in charge of the Milei administration's culture wars, was also brought on board. It wasn't clear if he was being shielded from the attacks that emerged in the aftermath of his controversial intervention in Milei's post-$LIbra scripted interview, during which he cut the recording and instructed journalist Jonatan Viale to skip an uncomfortable question regarding the President's legal strategy. That fragment was later leaked, leading some to believe that it was a purposeful blow by Grupo Clarín, the media juggernaut which recently acquired the local arm of Spanish telecoms giant Telefónica, much to the administration's disappointment. From a political perspective, Milei's February trip to Washington was successful in motivating the grassroots followers (in particular his moment in the spotlight when he gave billionaire Elon Musk a pimped-out chainsaw that the head of the US Department of Government Efficiency, or DOGE, exhibited to the crowd). They also secured a shout out from US President Donald Trump, who told Milei paternalistically that he is 'proud' of him. It was substantially more successful than Milei's latest US trip, where he visited Mar-a-Lago to receive an award and supposedly secure another picture with Trump, which ultimately ended in Argentina's Foreign Minister pulling the delegation amid yelling and name calling. Trump is said to have been surprised that Milei left fifteen minutes before his arrival.
The suspicion of a secret meeting between Milei and Hayden Mark Davis or his entourage remains, even though official sources denied it to Perfil. Initially, Milei's participation in the $Libra scam was attributed to ignorance but as investigations have progressed, the prime suspect has become Karina, the President's de facto gatekeeper and Morales' political boss. These lines of investigation, along with the movement of funds seen on the blockchain, have been aggressively pursued by a handful of investigative journalists, yet Argentina's Judiciary continues to drag its feet. Yanina Nicoletti, Hayden's initial defense lawyer, had posted on social media criticizing the investigation led by federal prosecutor Eduardo Taiano for failing to investigate those 'truly responsible' for the $Libra scam. Indeed, after initially sitting on the case for a week, Judge María Servini had delegated the investigation to Taiano, who asked the cybersecurity unit of the prosecution to help him preserve any evidence. He's formally investigating whether Milei, Davis, Peh, Novelli, Godoy, and Morales have committed any crime, an investigation that is disputed by Judge Sandra Arroyo Salgado, meaning there's a lot going on behind the scenes. Yet, if evidence had to be tampered with or destroyed, the perpetrators had ample time to do so.
Initially, the Milei administration managed to avoid a Senate investigation into the $Libra scandal, while the President had ordered the Investigations Task Force to analyze the case. Interestingly, the taskforce team, which responds to the Executive, was going to be run by María Florencia Zicavo – chief-of-staff to Justice Minister Mariano Cúneo Libarona, the man who Milei initially suggested would defend him in the courts. Suspicions of previously negotiated impunity go further: Prosecutor Taiano's son Federico is employed by Guillermo Francos, Milei's Cabinet chief and Interior minister. It all stays within the circle of trust, it seems. Ultimately, the disjointed opposition in the Chamber of Deputies managed to secure quorum and win a vote forcing an investigative committee to be put together. It will be a political ordeal, that's for sure, but it will remain a thorn in the Milei administration's side.
Milei has tried to double down, pushing forth with his administration's agenda. Yet, the loss of political capital has finally hit the libertarians where it hurts. They tried to impose two Supreme Court Justices by decree, only to see the Senate rebuke them. They have been in the eye of the storm for violent repression of street protests. And the peso-dollar exchange rate had begun to get out of control, forcing them to burn through $3 billion in foreign exchange reserves. The recent deal with the International Monetary Fund should give the President some breathing room, as he tries to recover momentum ahead of the midterm elections that will see him confronting not only the Peronist and Kirchnerist segments, but also former President Mauricio Macri, a recent ally. The $Libra crypto-scandal will continue to lurk in the background, popping its ugly face here and there as journalists, crypto-sleuths, or official investigators manage to push the case forward. In the meantime, Milei will try to ignore it as Davis continues to operate in the shadows, under the tacit protection of the Trump administration's push for deregulation of crypto.
This piece was originally published in the Buenos Aires Times, Argentina's only English-language newspaper.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Politico
a day ago
- Politico
The ripple effects of the BLS firing
SLIPPERY SLOPE — The good news for Donald Trump is that the Jeffrey Epstein saga didn't dominate the news cycle today. The bad news? Four days after firing the head of the Bureau of Labor Statistics, the president was still answering questions about sacking the civil servant who served as the stats chief for economic data, and his unproven claims that the latest jobs data was rigged to make him look bad. His party has largely circled the wagons around him. Critics continue to draw some of the most unflattering — and uncustomary — parallels possible. Trump's move, they argue, is placing the world's largest and most advanced economy in the company of basket cases and developing economies. Janet Yellen, the former Treasury secretary and chair of the Federal Reserve, described the firing to the New York Times as 'the kind of thing you would only expect to see in a banana republic.' Others see comparisons to Argentina and Greece, two nations where government meddling with economic data famously led to harsh consequences. In Argentina, former President Nestor Kirchner fired the head of his government's economic data agency and pushed the agency to produce rosier numbers. Argentinians began to doubt the veracity of the numbers, leading to even more pessimism about the country's economic outlook. The government's data was widely dismissed as unreliable, and the International Monetary Fund censured the government for not providing accurate economic data. 'It may sound implausible, but the same erosion of trust can happen to the United States if institutions like the BLS are politicized,' says Argentine economist Martín Uribe. In a statement, the Council of Professional Associations on Federal Statistics wrote that the rationale for firing Erika McEntarfer, the former BLS commissioner, undermines the credibility of federal economic statistics. 'When leaders of other nations have politicized economic data, it has destroyed public trust in all official statistics and in government science,' the statement said. The BLS is already struggling under resource cuts, staff reductions and declining response rates, and those challenges could worsen under a more partisan BLS commissioner, says economist Jed Kolko, who served as under secretary of commerce in the Biden administration. While he stressed that 'we're a very long way' from U.S. economic data being unreliable, Kolko says he worries about the BLS failing to publish thorough data sets that allow analysts to verify its numbers. In that case, decision-makers could be left to rely on private sector data to fill in the gaps. But that alternative faces serious limitations, he says, because private sector data is often checked against the federal government's numbers to ensure it's accurate. 'Once credibility starts to unravel, it is hard to rebuild,' Kolko says. 'And policymakers, investors, businesses, households, all make decisions based on economic data that they need to be able to trust.' The nomination of a partisan BLS commissioner as McEntarfer's successor could make things worse. And it would have knock-on effects at other agencies like the Census Bureau or the Bureau of Economic Analysis if civil servants fear presenting the White House with data that upsets the president, according to Kyle Handley, an adjunct scholar at the Cato Institute who leads UC San Diego's Center for Commerce and Diplomacy. Handley stresses that giving up its edge in data reliability could mean 'ceding ground to other countries' for the U.S. 'A lot of organizations rely on us for government data, like the IMF and the World Bank, and that gives Washington some informational leverage on these international institutions,' says Handley. 'And if they don't think that the U.S. is the gold standard of statistics and data reliability anymore, then that's just another way in which the U.S. will become less of a player.' That's in addition to a likely impact on bond yields resulting from a lack of confidence in economic data, which could further damage the American economy by impeding capital flows into the U.S. The Trump administration's approach to trade policy could also be undermined since it is underpinned by the bet that the U.S. economy can withstand an extended trade war. If trading partners doubt data showing the strength of the U.S. economy, that could weaken the White House's position, says economist Steven Kamin, a senior fellow at the American Enterprise Institute who has worked for the Fed and the White House Council of Economic Advisers. The appointment of a truly independent civil servant to lead the BLS would avoid that worst-case scenario. But even if the firing was just a fleeting burst of anger, says Kamin, trust in the agency will still take a hit. 'If the temporary fit of pique explanation holds, this certainly still degrades the U.S. standing in the world,' says Kamin. 'It reduces the administration's credibility. It reduces the desire of investors to hold U.S. dollar assets, and it reduces the desire of our trading partners to work with us.' Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@ Contact tonight's author at jwendler@ or on X (formerly known as Twitter) at @jacob_wendler. What'd I Miss? — Trump says he will 'probably not' seek a third term: President Donald Trump said Tuesday he would 'probably not' run for a third term. 'I'd like to run,' he said when asked about the possibility on CNBC's Squawk Box. 'I have the best poll numbers I've ever had.' The 22nd Amendment prohibits anyone from being elected president more than twice. That applies to Trump as well, despite his two terms being nonconsecutive. But allies of the president — and Trump himself — have repeatedly floated him serving another term despite that constitutional prohibition. There are possible ways Trump could try to get around this mandate, including repealing the amendment or running for vice president and ascending to the presidency. Trump has previously declined to rule out a third term, saying in March there 'are methods' to assume office again if he wanted to. — Comer issues subpoenas for DOJ's Epstein files, depositions with former officials: The House Oversight Committee on Tuesday issued subpoenas for Department of Justice records on the Jeffrey Epstein investigation, as well as for interviews with a slate of former government officials in connection to the case. Oversight Chair James Comer (R-Ky.) announced that he was summoning nearly a dozen former officials to appear for depositions on the Epstein investigation — a list that includes former President Bill Clinton and former Secretary of State Hillary Clinton. Former U.S. Attorneys General William Barr, Alberto Gonzales, Jeff Sessions, Loretta Lynch, Eric Holder and Merrick Garland, as well as former FBI Directors Robert Mueller and James Comey were also tapped to give testimony in connection to the case. — Maxwell doesn't want grand jury materials in her case unsealed: Ghislaine Maxwell told a federal judge Tuesday that she opposes the Justice Department's effort to unseal grand jury transcripts in her case, which she described in court papers as a 'broad intrusion into grand jury secrecy.' Maxwell's opposition makes it less likely that a judge will agree to unseal any of the material, which would likely add little to the public's understanding of the matter even if it were to be disclosed. In a court filing Monday night, the Justice Department said that 'much' of the information in the grand jury testimony has already been made public, in part through Maxwell's trial. — Texas AG Paxton will try to expel Texas Democrats if they don't return by Friday: Texas Attorney General Ken Paxton is moving forward with a plan to remove quorum-breaking House Democrats from office, asserting that by leaving the state they have abandoned their positions, his office announced Tuesday. Paxton said he would begin asking Texas courts on Friday to remove the Democrats if they do not return to Austin. The legal process to remove the lawmakers will likely take time. First, Paxton must file a case against each individual absent Democrat in various district courts, a process that would surely lead to appeals and could drag out long beyond the end of the special session on Aug. 19. AROUND THE WORLD CONTRACEPTION INTERVENTION — Lawmakers and NGOs are pressuring Paris and Brussels to intervene and prevent the incineration of nearly $10 million worth of contraceptives owned by the defunded U.S. Agency for International Development (USAID) program. The contraceptives, which are currently being stored in Belgium and are set to be destroyed in France, will not be distributed as initially planned due to the reinstatement of a U.S. policy that prohibits sending aid to organizations that provide abortion services, a U.S. State Department spokesperson told the Guardian in July. 'We are asking the European Commission to intervene,' Mélissa Camara, a French Green MEP who sent a letter to Commission President Ursula von der Leyen about this case told POLITICO on Friday. BUDGET INFLUENCER — François Bayrou doesn't do holidays. Luckily, the battle for the hearts and minds of French taxpayers is keeping him occupied. The French prime minister has launched a series of videos, called 'FB Direct,' to convince the public that the €43.8 billion budget squeeze he has planned for next year is not an act of sadism — but an unavoidable move to prevent a budget crisis. 'All politicians are going on a well-deserved vacation. I will not because the days we're going to live through during these weeks of August and early September are absolutely crucial. This is the moment when everything is at stake,' Bayrou said in the first of these videos published on Tuesday. Last month, during a two-hour press conference billed as 'a moment of truth,' the French prime minister unveiled his draconian plans to drastically cut public spending in 2026. DEADLOCK AHEAD — Karol Nawrocki is being sworn in Wednesday for a five-year term as Poland's president, but it's not going to be a happy day for Polish Prime Minister Donald Tusk. June's narrow electoral victory by Nawrocki — a nationalist openly allied with U.S. President Donald Trump — delivered a massive body blow to the political prospects of the ruling coalition led by pro-EU centrist Tusk. That threatens to stall the legislative agenda of the EU's fifth-largest country and to slow a push to restore rule of law that led to a breakdown of relations between Warsaw and Brussels. But there are efforts to find common cause between Nawrocki and the centrists in areas like defense — where everyone can agree Russia is the enemy. 'The right-wing opposition candidate's presidential election victory has radically changed Poland's political dynamics, scuppering the liberal-centrist coalition government's plans to reset its reform agenda,' wrote Aleks Szczerbiak, a professor at the University of Sussex who studies Polish politics. Nightly Number RADAR SWEEP PALANTIR DEGREE — A growing number of young people, mostly men, are forgoing college to head straight to Silicon Valley to become entrepreneurs or score a job at a big tech company. The phenomenon reflects Silicon Valley's anti-elitism streak, influenced by tech titan Peter Thiel's disdain for higher education, but has also been exacerbated by the Trump administration's attack on Ivy League schools. Julia Hornstein reports on the young men chasing the myth of the college dropout founder. Parting Image Did someone forward this email to you? Sign up here.
The Hill
2 days ago
- The Hill
Milei vetoes pension and disability spending increases, citing fiscal deficit pledge
BUENOS AIRES, Argentina (AP) — Libertarian President Javier Milei on Monday vetoed an attempt to increase spending on pensions in Argentina and a law expanding protections for people with disabilities, saying the legislation would have undermined his flagship pledge to eliminate the country's chronic fiscal deficit before October's midterm elections. In publishing the veto decisions, Milei's administration said that Congress last month passed the spending bills — meant to more fully compensate retirees for inflation and offer more financial benefits for people with disabilities — 'without determining the source of the funds.' It said the bills 'contradicted (Milei's) popular mandate' to bring down inflation. Since coming to power in late 2023, Milei has vetoed all efforts to boost public spending, often wielding the slogan 'there is no money' against people's demands that he restore subsidies. The government projects that the additional expenditures, including a 7.2% pension increase, will amount to about 0.9% of gross domestic product this year and 1.68% next year. 'This president prefers to tell an uncomfortable truth rather than repeat comfortable lies: There is no money,' the government said. Spinning off the slogan of his ally, U.S. President Donald Trump, it added: 'The only way to make Argentina great again is with effort and honesty, not the same old recipes.' Last year Milei racked up Argentina's first annual fiscal surplus in 14 years by making painful cuts to social spending and public works. The austerity measures helped drive down Argentina's monthly inflation rate to below 2% in June for the first time in five years, compared to more than 25% when Milei entered office in December 2023. But the fiscal shock program has also deepened economic misery for many Argentines: Unemployment has climbed, wages adjusted for inflation have declined and prices are still up 40% year-on-year. Congress can still overturn these vetoes with a two-thirds majority in both chambers, a challenge for Milei's libertarian party, which holds only a small minority of seats. Milei, whose relationship with lawmakers has been tense ever since he took office, last year managed to win enough votes from his party's closest ally, the conservative PRO bloc, to prevent the pension increases. Milei is looking to Argentina's crucial midterm elections in October to boost his party's representation as he seeks to continue his fiscal balance drive and draw more foreign investment. The elections are widely seen as a referendum on his two years in office. Retirees have been at the forefront of protests against Milei's government. Every Wednesday now for months, dozens of older Argentines struggling to scrape by on pensions of just $400 a month have faced off against security forces armed with tear gas and water cannons.
San Francisco Chronicle
2 days ago
- San Francisco Chronicle
Argentina's Milei vetoes pension and disability spending increases, citing fiscal deficit pledge
BUENOS AIRES, Argentina (AP) — Libertarian President Javier Milei on Monday vetoed an attempt to increase spending on pensions in Argentina and a law expanding protections for people with disabilities, saying the legislation would have undermined his flagship pledge to eliminate the country's chronic fiscal deficit before October's midterm elections. In publishing the veto decisions, Milei's administration said that Congress last month passed the spending bills — meant to more fully compensate retirees for inflation and offer more financial benefits for people with disabilities — 'without determining the source of the funds." It said the bills 'contradicted (Milei's) popular mandate' to bring down inflation. Since coming to power in late 2023, Milei has vetoed all efforts to boost public spending, often wielding the slogan 'there is no money' against people's demands that he restore subsidies. The government projects that the additional expenditures, including a 7.2% pension increase, will amount to about 0.9% of gross domestic product this year and 1.68% next year. 'This president prefers to tell an uncomfortable truth rather than repeat comfortable lies: There is no money," the government said. Spinning off the slogan of his ally, U.S. President Donald Trump, it added: "The only way to make Argentina great again is with effort and honesty, not the same old recipes.' Last year Milei racked up Argentina's first annual fiscal surplus in 14 years by making painful cuts to social spending and public works. The austerity measures helped drive down Argentina's monthly inflation rate to below 2% in June for the first time in five years, compared to more than 25% when Milei entered office in December 2023. But the fiscal shock program has also deepened economic misery for many Argentines: Unemployment has climbed, wages adjusted for inflation have declined and prices are still up 40% year-on-year. Congress can still overturn these vetoes with a two-thirds majority in both chambers, a challenge for Milei's libertarian party, which holds only a small minority of seats. Milei, whose relationship with lawmakers has been tense ever since he took office, last year managed to win enough votes from his party's closest ally, the conservative PRO bloc, to prevent the pension increases. Milei is looking to Argentina's crucial midterm elections in October to boost his party's representation as he seeks to continue his fiscal balance drive and draw more foreign investment. The elections are widely seen as a referendum on his two years in office. Retirees have been at the forefront of protests against Milei's government. Every Wednesday now for months, dozens of older Argentines struggling to scrape by on pensions of just $400 a month have faced off against security forces armed with tear gas and water cannons.
