Following his public support of the $LIBRA cryptocurrency—a digital asset that has since experienced a severe price drop, Argentine President Javier Milei is confronting one of the most notable political and financial scandals of his administration. Called “Cryptogate” by both local and foreign onlookers, the event has raised major accusations of a rug pull fraud with alleged losses of more than $250 million for investors and calls for a thorough enquiry into Milei’s involvement in the catastrophe.
Known for his pro-liberty and anti-establishment economic beliefs, President Milei pushed $LIBRA via several public channels, calling it a revolutionary financial tool aimed to empower Argentina’s people and encourage economic involvement. Especially in a nation with a history of inflation and financial instability, he depicted the cryptocurrency as a decentralised asset that may assist avoid conventional banking systems. Investors read the endorsement as a green signal, which led to a quick increase in the coin’s value and significant retail investor money draw from both home and foreign countries.
Within hours of the presidential support, $LIBRA’s market capitalisation exploded into billions of dollars. Driven by faith in Milei’s public image and conviction in the president’s backing of crypto-based solutions to Argentina’s financial troubles, retail investors rushed to the coin. The enthusiasm, though, was fleeting. $LIBRA dropped over 90% in under a day, almost as fast as it climbed, indicating a catastrophic decline in value. The steep drop set off panic selling that destroyed hundreds of millions of dollars and left a path of furious investors behind.
This sudden drop has raised grave questions and allegations of a rug pull—a phrase used in the cryptocurrency sector to characterise a scenario when the developers of a project suddenly remove liquidity or abandon the token, hence left investors with worthless assets. Critics have said Milei’s public support gave credibility to a project that seems to have been quite faulty, if not deliberately misleading even if no clear proof links him to the coin’s creation or backend management.
Opposition politicians lost no time in capitalising on the catastrophe. The Argentine Congress swiftly passed a resolution to look into the president’s participation in the event. With a notable majority, the vote went through; a congressional panel has been established to investigate further the kind of the endorsement and whether Milei or any of his advisors had previous knowledge of $LIBRA’s internal structure or financial weaknesses.
Apart from legislative activity, Argentine federal prosecutors have started a distinct criminal enquiry into the event. The investigation will look into any presidential and his allies’ linked misuse of power, public trust violation, or financial wrongdoing. Names said to be under investigation include several of Milei’s close aides and economic advisors, many of whom supposedly interacted with $LIBRA’s developers or marketers before its public release.
The controversy has had far-reaching effects. Domestically, it has greatly eroded public confidence in the Milei government, especially among middle-class Argentinians who were pulled into the crypto project under Milei’s support. Protests have broken out in Buenos Aires and other major cities as people call for justice for the financial losses suffered. Political rivals, who are presenting the event as the final proof of poor leadership in an economic crisis, are exploiting it to demand the president’s resignation or perhaps impeachment.
The controversy has drawn attention abroad among investors and authorities both. Claiming they were misled by the apparent credibility the project acquired from its relationship with a sitting head of state, several impacted investors outside Argentina are now getting ready legal action. The part of government officials in supporting uncontrolled digital assets—a murky area still mostly untouched in most jurisdictions—is also receiving more attention from regulatory agencies.
Under increasing pressure, Milei has claimed no misconduct and maintained that his advocacy of $LIBRA was intended to encourage innovation and economic decentralisation. Though detractors claim the organisation lacks enough independence to carry out an impartial investigation since its leadership was nominated by Milei himself, he has permitted the Anti-Corruption Office to look into his own conduct.
Milei’s reputation may already be harmed despite his public defence. Surveys done after the $LIBRA failure reveal a clear decline in approval ratings and a notable increase in public discontent. Once praised as a daring reformer ready to question Argentina’s financial orthodoxy, Milei now finds himself at the centre of a controversy that might shape his presidency and maybe cut it short.
The $LIBRA issue is rapidly turning a defining event in Argentina’s contemporary political history as probes continue. It highlights the dynamic crossroads between politics and cryptocurrencies and the risks of using political power in speculative digital markets without appropriate control. Whether Milei can survive the storm is still unknown, but one thing is certain: Argentina is watching, and so is the rest of the world.
