Javier Milei, the Argentine president, has found himself entangled in a significant scandal following his endorsement of a Solana-based memecoin, $LIBRA, which led to significant losses for a majority of investors. The president’s promotion propelled the value of $LIBRA to a staggering $4.5 billion before it dramatically collapsed, leaving a staggering 86% of investors in financial peril. This revelation comes from an extensive research note released by Nansen today, highlighting that while thousands suffered losses, a few insiders managed to walk away with $180 million in profits.
Detailed on-chain data gathered from over 15,000 wallets by Nansen’s Nicolai Sondergaard unveiled a surprising truth: a select group of traders appeared to have inside information, selling their holdings before the inevitable crash. “Concrete on-chain evidence shows a cohort of insiders profiting while the general public suffered significant losses,” Sondergaard stated in the report. This incident, the timing of it, and the involvement of government officials, have culminated into the most significant political scandal of Milei’s presidency.
The president’s promotion of $LIBRA directed users to a website that claimed that the coin would generate funds for struggling Argentine businesses. This caused a frenzy of activity with trading bots and snipers—automated systems designed to front-run new tokens—swooping in to buy up the coin. The frenzy continued with a massive influx of traders, pushing the market cap to $4.5 billion. Unfortunately, before most investors had the chance to react, the price plummeted by 80%.
As the dust settled, it was revealed that Milei had deleted his promotion post, claiming ignorance about the project’s details and distancing himself from the token. However, blockchain data told a different story, alluding to insider trading and massive profiteering.
Solana, the platform on which $LIBRA was based, also suffered a significant blow. Its native token lost 20% of its value, and the total value locked (TVL) across the network dropped from $12.1 billion to $8.29 billion, as per DefiLlama data.
In the midst of this escalating scandal, Hayden Davis, the individual who deployed $LIBRA, found himself at the center of leaked text messages. In these messages, he boasted about paying Karina Javier, the president’s sister and General Secretary of Argentina, to manipulate the president’s decisions. While Davis denied these allegations, he did admit in an interview with Barstool Sports that he profited from the launch and was currently seeking ways to rectify the situation.
The fallout from this scandal has been significant. Argentine assets took a huge hit, with bonds underperforming and stocks plunging 6% before recovering the next day. The government’s inability to control the situation only added fuel to the fire.
This controversy shows no signs of slowing down. Amidst the chaos, the president’s closest circle has been scrambling, with Karina Javier avoiding the press entirely. This avoidance strategy is particularly notable, given that she is not only the president’s top adviser and strategist but also his gatekeeper.
Reflecting on the debacle, Milei acknowledged the level of access to both himself and his sister. This scandal underlines the need for greater transparency and regulation in the burgeoning world of cryptocurrency, as well as the potential pitfalls of involving politics in this volatile and high-stakes industry.
