Endorsed by the Argentine president, LIBRA collapses after Milei drops support, leaving investors holding the memecoin can

Following United States president Donald Trump, another leader of a nation in the Americas has become entangled in crypto currency controversy.

This time it's Argentina's ultra-libertarian president Javier Milei who is at the centre of attention. Milei initially boosted the $LIBRA memecoin on social media. The memecoin was marketed by "The Viva La Libertad" project (we'll see how long the site stays up), and Milei was all for it to start with:

Rough translation: "Liberal Argentina is growing!!!
This private project will be dedicated to incentivising the growth of the Argentine economy by funding small businesses and Argentine ventures. The world wants to invest in Argentina.
vivalalibertadproject.com
Contract: 2FAvUsU Bo9jh3wsmcC2AjakLWzNmKJ3SgtZmXEcSaW7L
$LIBRA
LONG LIVE FREEDOM, DAMN IT...!!!"

As per Milei's post, The Viva La Libertad project purported to be set up to organise funding for Argentine entrepreneurs, according to its site:

The Viva La Libertad Project was created with a clear mission: to boost the Argentine economy by funding small projects and local businesses, supporting those who seek to grow their ventures and contribute to the country’s development.

What happened in a very short period of time, in a matter of hours after its launch, is that LIBRA shot up to US$4.50 before crashing with some 95 per cent of its perceived value seemingly vanishing into the virtual void (but read on, and see below). The "market cap" was said to be pumped up to US$4 billion to $5 billion.

In crypto currency circles, the abrupt collapse is referred to as a "rug pull", as the backers of a memecoin abandon it after cashing out and pocketing fees. 

How much exactly has gone is difficult to say due to the volatile nature of crypto currencies, but the figure US$107 million has been mentioned. The usual caveat about any claims posted on the Internet applies, but indications are that small investors who dabbled in crypto currencies may have lost amounts substantial to them, with LIBRA tanking.

Hi @JMilei My $30,000 that I purchased of $LIBRA is now $2,000 after 1 hour of buying.

I am a huge fan of you but you took my life savings.

I purchased your coin $LIBRA that you were so excited about with my life savings and children’s college education fund as well.

You… pic.twitter.com/FmTwZFiXpz

— chabi (@chabiwit) February 15, 2025

Milei was quick to delete his post on X, promoting LIBRA, and added another one in which he denied involvement in the memecoin while threatening "the filthy rats of the political caste who want to take advantage of this situation to do harm, I want to say that every day they confirm how vile politicians are, and they increase our conviction to kick them in the ass" (again, rough, direct translation from Spanish).

However, one of the people in launching the memecoin, a gentleman named Hayden Davis of a Web3 company named Kelsier, issued a lengthy statement gainsaying the Argentinian president. Not only did Davis suggest that Milei endorsed and promoted Libra, but he said the president was to blame for the memecoin's crash:

FOR IMMEDIATE RELEASE
Libra Token Launch: Addressing Recent Developments

As a launch advisor for the Libra Token project, I want to clarify key aspects of the launch and address recent developments regarding Javier Milei's involvement and subsequent withdrawal of support. Javier Milei initially endorsed and actively promoted Libra Token on social media platforms, including X and Instagram.

His associates had secured his public support at launch and had assured me that his continued backing was guaranteed throughout the launch. Given my role as an advisor, my primary responsibility was ensuring the token had sufficient volume, liquidity, and a robust treasury to support its price and execute on the project's vision. However, as an advisor, there were many factors beyond my control.

Despite prior commitments, Milei and his team unexpectedly reversed their position, withdrawing their support and deleting all prior social media endorsements. This abrupt decision was made without any prior warning and directly contradicted previous assurances.

To my surprise, Milei later posted a statement indicating that his withdrawal was due to alleged misconduct by the project's backers, labelling them as scammers. I categorically reject this claim and want to emphasise that Julian Peh, founder of KIP Network and the primary sponsor of Libra Token, is completely innocent of any wrongdoing. I can only assume that Milei's associates attempted to shift blame onto Julian to shield themselves from accountability.

It is crucial to recognise that memecoin investments are driven by trust and endorsement. When Milei and his team deleted their posts, investors who had purchased the token based on their trust in his endorsement felt betrayed. This led to a wave of panic selling, further exacerbating the situation. The sudden loss of confidence had a catastrophic impact on the token's market stability.

Regarding my role, I was responsible for ensuring liquidity for the project and still maintain control over all associated fees and treasury funds. I want to make it unequivocally clear that I have not, nor will I, take any of these funds for my personal benefit. As the custodian—not the owner-of these funds, I do not feel comfortable transferring them to Milei's associates or the KIP team. Instead, after consulting with experts,

I am proposing to reinvest 100% of the funds under my control, as much as $100 million, back into the Libra Token and burn all bought supply. Unless a more viable alternative is presented, I intend to begin the process of executing on this plan within the next 48 hours.

I remain committed to transparency and will continue to provide updates as the situation develops. Hayden Davis

The KIP Protocol/Network is another entity involved in the Libra coin, run by an entrepreneur named Julian Peh.

This saga will no doubt develop further, and we'll see if any legal repercussions will arise from it. Milei's office said it has asked Argentinia's anti-corruption office to investigate the matter.

LIBRA doesn't appear to be Milei's first crypto currency venture. As a senator, before rising to the office of president, Milei became linked to the promotion of CoinX, another memecoin that promised 5 per cent to 8 per cent monthly returns - in US dollars. CoinX turned out to be a pyramid scheme/multi-level marketing (MLM) scam with thousands of people suffering losses and its ringleaders being arrested. 

Meanwhile, The New York Times and blockchain forensics firm Chainalysis did the numbers on Trump's $TRUMP memecoin, which shot up and crashed in a similar fashion to $LIBRA, and found that some 810,000 investors got burnt to the tune of US$2 billion in total. The report suggests an early trader made off with US$109 million, and the Trump family earnt over US$100 million in fees.

Update: Legal rumblings against Milei are appearing in Argentina.