Cryptocurrency promoted by Argentina's Milei crashes

by Nicolás BIEDERMAN

Argentina's President Javier Milei admitted making a mistake on Saturday after promoting a cryptocurrency whose value soared and then crashed, with his office announcing an "urgent investigation".

According to news outlets, Milei posted a message on social media platform X Friday evening, praising a "private project" aimed at "stimulating the growth of the Argentine economy, by financing small businesses and Argentine entrepreneurs."

"The world wants to invest in Argentina. $LIBRA," the post reportedly said, naming the cryptocurrency along with a website for the project.

Hours later, Milei deleted the message, saying: "I did not know the details of the project and after learning about it, I decided not to continue promoting it."

He added he had "obviously no connection" with the "alleged private company."

Argentine economists and crypto specialists, in addition to opposition political figures, criticized Milei and said that the digital asset could be a fraud or Ponzi scheme.

Industry observers called the operation a "rug pull" -- a scam where developers unveil a crypto token, attract investors, then quickly cash out.

"Within minutes of the launch, multiple large holders began liquidating MILLIONS of USD worth of $LIBRA," the Kobeissi Letter, which provides analysis on global capital markets, said in a thread on X.

"This included gains of +$4 million or more as $LIBRA rose to $4.6 billion in market (capitalization). After the top was set at 5:40 PM ET, the coin fell in a literal straight-line."

-'Global scam'-

In a statement on Saturday the Argentine presidency said that "in light of the events," Milei "has decided to immediately involve the Anti-Corruption Office (OA) to determine whether any improper conduct occurred by any member of the national government, including the president himself."

It stated that Milei had "not in any way participated in the development" of the cryptocurrency, and announced the creation of an investigation task force under the president's office to carry out an "urgent investigation into the launch of the cryptocurrency $LIBRA, and all companies or individuals involved."

Javier Smaldone, a computer scientist and digital influencer known for highlighting pyramid schemes, called the short-lived operation a "global scam," in a post on X.

"So far, it has been discovered that the profit made is around $107 million," he told AFP. "Maybe more."

- 'Crypto-scammer' -

On Saturday, former president and opposition figure Cristina Kirchner called Milei a "crypto-scammer."

Maximiliano Ferraro, of the center-right Civic Coalition, said Parliament must create a "special inquiry commission" to "clarify the facts and determine responsibility."

Francisco Onato, identified in local media as Milei's personal lawyer, posted on X that the president merely highlighted a company to boost Argentina's economy.

His behavior "does not constitute any crime, due to the lack of intention," he said.

© Agence France-Presse