Argentina’s opposition parties have revived a stalled investigation into President Javier Milei’s role in the LIBRA scandal, seizing on new corruption allegations that have rattled the government just weeks before October’s elections.

The commission, first created in April but largely paralyzed by bureaucratic and congressional hurdles, was reactivated on Aug. 28 after leaked recordings implicated Milei and his sister Karina in a separate bribery scheme.

The tapes, belonging to former presidential attorney and government official Diego Spagnuolo, contained claims of cash-for-favors dealings. Spagnuolo later admitted the recordings were authentic.

Public backlash fuels probe

The scandal has triggered a wave of public anger. On Wednesday, protesters hurled lettuce and rubbish at Milei during a public appearance, an act that drew headlines across the country.

While no injuries were reported, the incident highlights mounting unrest against the president’s administration. The fresh controversy has given the LIBRA probe new momentum. It had lost traction after Milei dissolved its initial task force in May.

The LIBRA affair centers on allegations of insider trading and a pump-and-dump scheme tied to the digital token, a case prosecutors say may have involved Argentina’s highest levels of power.

Maximiliano Ferraro, a legislator from the Civic Coalition ARI and head of the new investigative body, said the commission intends to establish whether misconduct occurred. Ferraro said the investigation was reignited because questions remain over whether insider trading took place.

Political stakes ahead of elections

Five opposition parties, representing 136 of the Chamber of Deputies’ 257 lawmakers, voted to reopen the case despite pushback from Milei’s allies.

The commission set a reporting deadline of Nov. 10, weeks after Argentines head to the polls.

The inquiry adds to the mounting challenges facing Milei as he navigates a presidency already strained by economic turmoil and growing discontent. The combination of corruption scandals and revived investigations could weigh heavily on his political future.

While the LIBRA scandal has shaken Argentina’s crypto community, the broader allegations of bribery and abuse of power have struck a deeper chord with the public. With elections looming, the outcome of the investigation, and its political fallout, remains uncertain.

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Lawmakers in Argentina are taking action to investigate a cryptocurrency scandal involving the nation’s president, Javier Milei.

On February 14th, the price of the newly-launched LIBRA memecoin surged after Milei posted about the project on his social media accounts.

Within hours, the token crashed, causing over 75,000 retail investors an estimated $280 million in losses. Milei removed his posts five hours after making them.

The incident prompted allegations of a rug pull scam, which happens when backers hype and inflate the price of a crypto asset and then suddenly abandon the project after taking the investors’ funds.

The Chamber of Deputies, the lower house of the Argentine National Congress, is now pushing forward with the investigation of the scandal following the approval of three draft resolutions related to LIBRA.

The first resolution to create an investigative commission was approved with 128 votes in favor, 93 against and seven abstentions.

The second, which seeks to question executive branch officials, including Chief of Staff Guillermo Francos, Minister of Economy Luis Caputo, Minister of Justice Mariano Cúneo Libarona and head of the National Securities Commission (CNV) Roberto Silva, received 131 affirmative votes and 96 negative votes.

The third resolution to request reports from the national government on various issues associated with the Libra cryptocurrency was approved with 135 votes in favor, 84 against and seven abstentions.

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Argentinian President Javier Milei said it would be “an honor” for Argentina to host the next edition of Devconnect, a gathering of independent events that foster the growth of the Ethereum ecosystem. 

Milei made the statement in response to Vitalik Buterin’s praise of Argentina’s Ethereum community. He said the energy and determination of builders based in the country are real and the event should be held there.

The Ethereum co-founder assessed that the recent LIBRA memecoin scandal should not be seen as a reason to stop believing in crypto but as a motivation to spread education.

He added:

“I continue to be very optimistic about Argentina and Latam’s contributions and role in the space.”

In another X post, Buterin suggested that the next edition of Devconnect should be hosted in Argentina. He said this could be a “great opportunity” to showcase good examples of crypto usage to the Argentinian community and then tagged Milei in the post.

Milei responded via social media:

“THANK YOU VERY MUCH VITALIK BUTERIN  FOR YOUR WORDS ABOUT ARGENTINE TALENT!!! It would be an honor for Argentina to host Devconnect. I agree that it would be a great opportunity for our country.”

According to Chainalysis’ “2024 Geography of Crypto Report,” Argentina has the 15th-largest crypto adoption index and leads Latin America in crypto value received, at an estimated $91.1 billion between 2023 and 2024.

LIBRA controversy

The interactions between the Argentinian President and the Ethereum co-founder come in the backdrop of significant controversy. Milei endorsed the memecoin LIBRA on Feb. 14, saying the token was a way to fund Argentinian ventures. 

The token reached a $4.5 billion valuation before crashing 95% over the weekend. A report by Nansen estimated that 86% of traders lost $251 million, and 70% of wallets trading the token over the weekend endured losses.

Hayden Davis, a key figure behind LIBRA, said in an interview that Milei had no financial stake in the token after the fiasco. Davis reportedly claimed to influence the Argentinian President by paying Milei’s sister.

Notably, Milei said he did not intend to promote the token and only shared it on social media as a gesture of good faith toward the industry.

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Author

Gino Matos

Reporter at CryptoSlate

Gino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).

Editor

Assad Jafri

Editor & Reporter at CryptoSlate

AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.