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The Independent
21-02-2025
- Business
- The Independent
Argentina's crypto scandal dings Milei, involves strange mix of characters
Argentine President Javier Milei is facing a corruption probe into his promotion of a meme coin, which is a highly speculative form of cryptocurrency that's seen a recent surge in popularity after President Donald Trump and his wife launched tokens of their own. The budding scandal in Argentina has been dubbed locally as 'cryptogate' and has links to a diverse cast of characters, including a high-profile U.S. influencer, a crypto developer who uses the pseudonym 'Meow,' and a 28-year-old American entrepreneur who said he helped launch First Lady Melania Trump's meme coin last month. Here's an explainer on what happened and where things stand: First off, what exactly is a meme coin? Meme coins are a type of cryptocurrency that are generally just goofs on internet memes, viral moments or celebrities that aren't trying to make use of a new techology or solve any new problems. They often have silly names, like Dogecoin, or Fartcoin. Critics – including many cryptocurrency enthusiasts -- say they are nothing more than digital Ponzi schemes that exist to enrich insiders at the expense of retail investors. Those more supportive say meme coins shouldn't be so easily dismissed and could be early indicators of ways in which the internet could revolutionize financial and other transactions. 'New technologies often look like a toy but evolve into something much more powerful over time,' Coinbase CEO Brian Armstrong said in a recent social media post. So, what happened with the meme coin associated with Milei? In short, a disaster. Milei, the tech-loving, chainsaw-wielding, libertarian president of Argentina, posted on X about the meme coin $LIBRA on Friday, just after it had launched, stating he was 'encouraging economic growth by funding small businesses and startups.' The coin's price soared almost immediately, pushing the market value for the project beyond $4 billion. A few hours after launch, early holders of the coin started cashing out of the project and its price collapsed. The trajectory of $LIBRA's price had the hallmarks of a 'rug pull,' a not uncommon phenomenon with meme coins. Rug pulls occur when insiders dump their holdings in newly launched meme coins that are soaring in value, which tanks the price and causes losses to newer investors. Milei deleted his initial post after the price collapsed and distanced himself from the project. By Monday, dozens of criminal complaints had been filed, a judge in Argentina had been selected to investigate allegations of fraud and Argentina's main opposition party called for his impeachment. A defiant Milei insisted he had acted in good faith and said that he had asked the Justice Ministry's Anti-Corruption Office to investigate if he or anyone else had committed wrongdoing. Who is a key player in this? Hayden Davis, a 28-year-old American crypto developer who said he's an adviser to Milei and helped launch $LIBRA, has emerged as a central figure. Milei's office said the government has no connection to Davis. In an interview with independent crypto journalist Stephen Findeisen, Davis said that meme coins are essentially a rigged game that benefit a small group of people at the expense of retail investors. 'It is an insiders' game. This is an unregulated casino,' Davis said. Davis said the $LIBRA coin was not a rug pull but was supposed to be an experiment to show the power and utility of digital currency that's consistent with Milei's desire for Argentina to be a hub for innovation. Davis also said he was involved in the launch of Melania Trump's meme coin. Launched just before her husband took office, that meme coin's price underwent a similar trajectory as $LIBRA – quickly soaring upon launch and then dropping. The first lady's office declined to comment. Who else was involved? Online influencer Dave Portnoy, who founded the Barstool Sports podcast empire and is a vocal gambling enthusiast, said on social media that Davis had told him about $LIBRA's launch before it went public and asked him to promote it. Portnoy said there were also discussions about the possibility of him interviewing Milei, much like he'd done with President Donald Trump during his first term. Portnoy said he did not buy any $LIBRA until after Milei's post on X and lost money on the purchase when the price crashed. Davis said he reimbursed Portnoy's losses. 'Meow' is the anonymous co-founder of a crypto firm involved in launching meme coins, including $LIBRA, said on social media that they were confident that no one at the firms had been involved in insider trading or financial wrongdoing. Still, Meow said the company had hired a law firm to conduct an independent investigation and that one of the company's leaders had resigned for showing 'a lack of judgement.' What's next for Milei? Cryptogate represents the first big scandal of Milei's presidency. Analysts said it risks eroding public confidence in Milei, who rose to prominence as an iconoclastic economist vowing to tame Argentina's sky-high inflation and eliminate corruption among the political elite. In a poll released Thursday by prominent Argentine consulting firm Zuban Cordoba and Associates, nearly 67% of respondents described cryptogate as the 'biggest crisis' of Milei's administration and over 83% said they thought Milei should stop acting as a social media influencer. The poll has a margin of error of plus or minus 2.8 percentage points. Questions remain over how this will affect the Mileli administration's perception among foreign investors at a crucial time in which the government is hoping to ease strict currency controls and negotiate a loan with the International Monetary Fund. He is now in Washington meeting with Tesla chief Elon Musk and other high-profile tech leaders in a bid to generate hype for his economic overhaul. What about meme coins? Meme coins don't appear to be going away anytime soon, but their track record should serve as a cautionary tale for investors and creators alike. The meme coins promoted by Trump and his wife have seen their prices fall dramatically since the days after their launch and drawn criticism from some Democrats and crypto enthusiasts. Hailey Welch, better known as Hawk Tuah Girl, saw her popularity plummet after her meme coin collapsed amid allegations of a rug pull. And celebrity Caitlyn Jenner is the defendant in an ongoing class action lawsuit filed by investors who said they were duped into losing money on the $JENNER meme coin. Welch and Jenner have both denied wrongdoing. The impoverished Central African Republic issued a meme coin earlier this month. After a brief spike, its price has also collapsed. ___
Saudi Gazette
19-02-2025
- Business
- Saudi Gazette
Argentina's President Milei denies crypto fraud allegations
BUENOS AIRES — Argentine President Javier Milei has denied promoting a newly launched cryptocurrency which collapsed shortly after he mentioned it in a social media post on cryptocoin $Libra quickly rose in value before nosediving, causing severe losses for the majority of people who had invested in it.A judge will now determine if the president should face fraud charges over the Monday, Milei said he had acted "in good faith" and dismissed investors' complaints, comparing their actions to people who gamble: "If you go to a casino and lose money, what's there to complain about when you knew the risks?"President Milei spoke about the $Libra incident in an interview with Argentine TV channel Todo Noticias on Monday, after a weekend during which he had stayed unusually quiet on social insisted that his post on X, which contained a link to a site selling $Libra, did not constitute an endorsement."I didn't promote it, I merely shared it," he told Todo Noticias' Jonny post, which he deleted after just a few hours, drew heavy criticism not just from his political rivals in Argentina but also from those who had invested in the have argued the $Libra launch resembled a "rug pull" — where promoters draw in buyers, only to stop trading activity and make off with the money raised from presidential office insisted that Milei was in no way involved in the development of $Libra and announced that the Anti-Corruption Office would determine if the president had acted himself defended deleting his post, saying that at the time he did not know "the details of the project and after learning about it, I decided not to continue promoting it".Opposition politicians, however, have not been placated by the statements, threatening to start impeachment proceedings against political analysts point out that the opposition is unlikely to get the votes needed for an impeachment trial to go ahead, the scandal threatens to divert Milei's attention away from his radical reform agenda.A federal judge has been tasked with deciding whether fraud allegations brought against the president by a number of plaintiffs should go his TV interview, Milei appeared combative, stressing that he had "nothing to hide".He also said that those who had invested in $Libra had done so "voluntarily" and knew of the risks. "It's like playing Russian roulette and getting the bullet." — BBC
WIRED
18-02-2025
- Business
- WIRED
Memecoin Scandal Threatens Argentina's Milei
Feb 18, 2025 9:55 AM The president is facing calls for impeachment and a possible criminal investigation for his role in the rise and fast collapse of $Libra. Javier Milei, presidente de Argentina Luis Robayo/AFP via Getty Images Argentina's president Javier Milei has come under fire for the abrupt collapse of a cryptocurrency he promoted, in a move that has triggered lawsuits and calls for his impeachment. Milei is facing more than 100 complaints against him at the country's supreme court, accusing him of participating in an alleged scam related to the cryptocurrency $Libra, which opposition politicians estimate has resulted in financial losses for 40,000 people. On February 14, the Argentine leader posted a message on his X account, which has 3.8 million followers: "Liberal Argentina grows! This private project will be dedicated to encourage the growth of Argentina's economy, funding small Argentine companies and ventures. The world wants to invest in Argentina. $Libra," he said. In a matter of minutes, $Libra went from being worth fractions of a cent to $4.97 per unit. But unfortunately for investors, this hike was short-lived. Within hours it plummeted to $0.19. Now, prosecutors will determine if there are sufficient elements to move forward with a criminal investigation against the president and other possible suspects. Milei is accused of helping to inflate the price of the currency by promoting it on X, and then withdrawing his support causing the cryptocurrency to collapse. Former Argentinian president Cristina Kirchner claimed that Milei was a 'crypto fraudster,' in a lengthy post on X in which she also accused him of turning the country into a casino in which he was the croupier. 'The president has to come to congress. He cannot investigate himself,' said politician Esteban Paulon, a member of the opposing socialist party, in a message on X calling for Milei's impeachment. Milei has since distanced himself from this collapse, claiming he did not benefit from the memecoin. 'A few hours ago I posted a tweet, as I have done countless times before, about private initiatives that seek to contribute to the development of our country. I have no relationship with the company that created this cryptocurrency nor have I received any benefit.' In a statement on X, the official account for the office of the Argentinian president said: 'Given the facts, President Javier Milei has decided to immediately involve the Anti-Corruption Office (OA) to determine whether there was improper conduct on the part of any member of the National Government, including the President himself.' Entrepreneur Hayden Mark Davis, one of the creators of the cryptocurrency $Libra, also blamed Milei for the collapse. 'His [Milei's] team had secured his public support at launch and assured me that his support would continue throughout the process,' the American investor said in a statement released by his firm, Kelsier Ventures. 'Despite prior commitments, Milei and his team unexpectedly reversed their position, withdrawing their support and removing all previous endorsements on social media,' Davis claimed, indicating that this setback would have triggered panic selling of the token. 'It is critical to recognize that memecoin investments are driven by trust and endorsement. When Milei and his team removed their posts, investors who had purchased the token, basing their trust on that endorsement, felt betrayed.' Despite the allegations, Davis said in a video posted on X that Milei still has his support. He even introduced himself as 'his advisor,' and said that he will continue to collaborate on other tokenization projects in Argentina. "My primary responsibility was to ensure that the token had sufficient volume, liquidity and a solid treasury to support its price and execute the vision of the project," Davis said, by way of personal justification. 'However, as an advisor, there were many factors beyond my control.' In January, Milei wrote about a meeting he had with Davis, who allegedly "advised him on the impact and applications of blockchain technology" that could be expected in Argentina. Faced with this response, Davis, his alleged advisor, contradicted the head of Argentina's executive branch, assuring that prior assurances were not respected, and regretted Milei's actions. "To my surprise, Milei later issued a statement indicating that his withdrawal was due to alleged misconduct on the part of the project's sponsors, calling them swindlers." Davis came out in defense of the other project partners, emphasizing 'that Julian Peh, founder of KIP Network and lead sponsor of Libra Token, is completely innocent of any wrongdoing.' This story originally appeared on WIRED en Español and has been translated from Spanish.
MTV Lebanon
18-02-2025
- Business
- MTV Lebanon
Argentina's President Milei denies crypto fraud allegations
Argentine President Javier Milei has denied promoting a newly launched cryptocurrency which collapsed shortly after he mentioned it in a social media post on Friday. The cryptocoin $Libra quickly rose in value before nosediving, causing severe losses for the majority of people who had invested in it. A judge will now determine if the president should face fraud charges over the incident. On Monday, Milei said he had acted "in good faith" and dismissed investors' complaints, comparing their actions to people who gamble: "If you go to a casino and lose money, what's there to complain about when you knew the risks?" President Milei spoke about the $Libra incident in an interview with Argentine TV channel Todo Noticias on Monday, after a weekend during which he had stayed unusually quiet on social media. He insisted that his post on X, which contained a link to a site selling $Libra, did not constitute an endorsement. "I didn't promote it, I merely shared it," he told Todo Noticias' Jonny Viale. Milei's post, which he deleted after just a few hours, drew heavy criticism not just from his political rivals in Argentina but also from those who had invested in the cryptocurrency. Some have argued the $Libra launch resembled a "rug pull" - where promoters draw in buyers, only to stop trading activity and make off with the money raised from sales. The presidential office insisted that Milei was in no way involved in the development of $Libra and announced that the Anti-Corruption Office would determine if the president had acted improperly. Milei himself defended deleting his post, saying that at the time he did not know "the details of the project and after learning about it, I decided not to continue promoting it". Opposition politicians, however, have not been placated by the statements, threatening to start impeachment proceedings against Milei. While political analysts point out that the opposition is unlikely to get the votes needed for an impeachment trial to go ahead, the scandal threatens to divert Milei's attention away from his radical reform agenda. A federal judge has been tasked with deciding whether fraud allegations brought against the president by a number of plaintiffs should go ahead. In his TV interview, Milei appeared combative, stressing that he had "nothing to hide". He also said that those who had invested in $Libra had done so "voluntarily" and knew of the risks. "It's like playing Russian roulette and getting the bullet."
Yahoo
18-02-2025
- Business
- Yahoo
Argentina's President Milei denies crypto fraud allegations
Argentine President Javier Milei has denied promoting a newly launched cryptocurrency which collapsed shortly after he mentioned it in a social media post on Friday. The cryptocoin $Libra quickly rose in value before nosediving, causing severe losses for the majority of people who had invested in it. A judge will now determine if the president should face fraud charges over the incident. On Monday, Milei said he had acted "in good faith" and dismissed investors' complaints, comparing their actions to people who gamble: "If you go to a casino and lose money, what's there to complain about when you knew the risks?" President Milei spoke about the $Libra incident in an interview with Argentine TV channel Todo Noticias on Monday, after a weekend during which he had stayed unusually quiet on social media. He insisted that his post on X, which contained a link to a site selling $Libra, did not constitute an endorsement. "I didn't promote it, I merely shared it," he told Todo Noticias' Jonny Viale. Milei's post, which he deleted after just a few hours, drew heavy criticism not just from his political rivals in Argentina but also from those who had invested in the cryptocurrency. Some have argued the $Libra launch resembled a "rug pull" - where promoters draw in buyers, only to stop trading activity and make off with the money raised from sales. The presidential office insisted that Milei was in no way involved in the development of $Libra and announced that the Anti-Corruption Office would determine if the president had acted improperly. Milei himself defended deleting his post, saying that at the time he did not know "the details of the project and after learning about it, I decided not to continue promoting it". Opposition politicians, however, have not been placated by the statements, threatening to start impeachment proceedings against Milei. While political analysts point out that the opposition is unlikely to get the votes needed for an impeachment trial to go ahead, the scandal threatens to divert Milei's attention away from his radical reform agenda. A federal judge has been tasked with deciding whether fraud allegations brought against the president by a number of plaintiffs should go ahead. In his TV interview, Milei appeared combative, stressing that he had "nothing to hide". He also said that those who had invested in $Libra had done so "voluntarily" and knew of the risks. "It's like playing Russian roulette and getting the bullet." Argentina president faces impeachment calls over crypto crash Milei, Musk and Maga: Is Argentina influencing the US?
