Millions lost, political turmoil, and legal investigations—what went wrong with $LIBRA
The Libra Token Scandal – In February 2025, Argentina faced a significant financial and political upheaval due to the rapid rise and fall of the cryptocurrency known as $LIBRA. Promoted by President Javier Milei, the token’s trajectory has led to widespread investor losses, legal investigations, and intense political debates.
The Emergence of $LIBRA
On February 14, 2025, the Panamanian company KIP Protocol launched the $LIBRA token as part of the “Viva La Libertad” project. Shortly thereafter, President Javier Milei endorsed the cryptocurrency on his official social media accounts, suggesting it would stimulate Argentina’s economy by funding small businesses and startups. This endorsement led to a meteoric rise in $LIBRA’s value, with the token’s price soaring from a fraction of a cent to over $5 within hours. However, this surge was short-lived; the value plummeted by 85% shortly after, resulting in substantial losses for investors.
Investor Impact and Financial Losses
The collapse of $LIBRA had devastating effects on investors. Blockchain research firm Nansen reported that approximately 86% of traders experienced losses exceeding $1,000, culminating in total losses of around $251 million. In contrast, a small group of early traders profited, collectively earning about $180 million. Notably, two wallets amassed combined profits of $5.4 million within minutes of the token’s launch, suggesting potential prior knowledge or insider information.
Political Repercussions and Legal Investigations
The scandal has severely impacted President Milei’s administration. Opposition lawmakers have called for his impeachment, accusing him of promoting a fraudulent scheme that led to significant public losses. Legal complaints have been filed, and a federal investigation is underway to determine the extent of Milei’s involvement and potential misconduct. The president has since deleted his promotional posts and claimed he was unaware of the project’s specifics, stating he had no direct connection to $LIBRA.
Key Figures Behind $LIBRA
Investigations have identified several individuals associated with the creation and promotion of $LIBRA:
Hayden Mark Davis: An American entrepreneur and CEO of Kelsier Ventures, Davis played a pivotal role in the development of $LIBRA. He has claimed to have managed up to $100 million related to the token and has denied intentions of personal gain, labeling the situation as a failed plan rather than a scam.
Julian Peh: A Singaporean national and CEO of KIP Protocol, Peh was instrumental in launching $LIBRA. He had previously met with President Milei, facilitating the project’s introduction to the Argentine market.
Mauricio Novelli and Manuel Terrones Godoy: Argentine entrepreneurs who collaborated on the project, leveraging their connections to promote $LIBRA within Argentina.
Broader Implications
The $LIBRA debacle has raised concerns about the influence of political endorsements on volatile financial instruments like cryptocurrencies. The incident has also sparked debates about the need for stricter regulations to protect investors from similar schemes in the future. Additionally, the scandal has cast a shadow over the Solana blockchain, which hosted $LIBRA, leading to a 15% decline in its native token’s value and raising questions about the platform’s association with speculative and potentially fraudulent projects.
Current Status
As of February 21, 2025, $LIBRA’s value remains significantly depressed, with many investors unable to recoup their losses. Legal proceedings are ongoing, focusing on the roles of President Milei and the project’s creators. The Argentine financial markets are closely monitoring the situation, especially in light of upcoming negotiations with the International Monetary Fund (IMF) regarding the country’s economic stability.
The $LIBRA token scandal serves as a cautionary tale about the risks associated with unregulated financial products and the potential consequences of political figures endorsing speculative investments without thorough due diligence.
