On Monday, an Argentine judge was appointed to look into the legal matters involving President Javier Milei after the libertarian leader promoted a cryptocurrency that subsequently collapsed, a situation the country’s fintech chamber described as potentially a “rug pull.
” A rug pull refers to a fraudulent scheme where developers attract investors, causing the value of a coin to skyrocket, only to swiftly withdraw their funds, leading to a drastic drop in the cryptocurrency’s value and leaving investors with worthless tokens.
Milei subsequently retracted his X post endorsing the obscure crypto coin $LIBRA, asserting that he had no connection to the cryptocurrency, but opposition lawmakers have suggested that Milei might face impeachment proceedings in Congress due to his actions.
On Monday, Argentina’s benchmark S&P Merval stock index fell by nearly 4%, after initially dropping almost 6%. The case was randomly assigned to experienced Federal Judge Maria Servini, following local media reports of over 100 complaints filed with the judiciary.
The token debuted on a cryptocurrency exchange named Meteora, which also launched the $Trump meme coin earlier in January, a cryptocurrency that experienced a quick rise and fall, resulting in an estimated 200,000 crypto wallets losing money. Ben Chow, co-founder of Meteora, stated in a post on X on Saturday that his team was “not engaged in the deployment, market making, or the decision to launch $LIBRA,” insisting that the company “never had any access to the tokens or Milei.”
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Chow further elaborated in a later post on Monday that the firm “had no role in the project apart from providing IT support, which included commenting on the liquidity curve and assisting in verifying the token’s authenticity after its public launch.” Analysts noted that the opposition is unlikely to secure enough votes to initiate impeachment proceedings. However, allegations of fraud and the potential for Milei’s direct involvement could present difficulties as his administration approaches mid-term elections this year.
Furthermore, ongoing investigations could provide a political moment for the opposition trying to regain ground against Milei, who has had a strong start to his term. Over the weekend, some investors expressed their outrage on social media, claiming they had been defrauded of their savings by the president of Argentina, while supporters of Milei stood by him, asserting that he was the target of politically motivated assaults.
“Irresponsible promotion of assets jeopardizes thousands of individuals,” stated ONG Bitcoin Argentina, a local educational non-profit, over the weekend. “We oppose this occurrence and reaffirm the necessity of education and transparency.” In the face of criticism, Milei responded vigorously. “To the filthy rats of the political establishment who seek to exploit this situation for harm, I want to assert that they daily show how despicable politicians are, which strengthens our resolve to kick them out,” Milei stated in a post on Friday where he mentioned that he had deleted his initial post.
