The beginning of the scandal
Last Friday, barely closed financial markets, Milei published in his official accounts of X (former Twitter) and Instagram a message promoting an alleged project called “Long live freedom.” According to the president, it was a private initiative designed to “encourage the growth of the Argentine economy, anchoring small national companies and ventures.” The announcement generated an immediate reaction in the financial and crypto ecosystem, leading to a wave of purchases in the Digital Currency $ Libra.
In a matter of minutes, the Token went from value zero to reach a price of $ 4.56, bosses largely for automated purchases made by great magnitude bots and acquisitions. The largest of them was an individual transaction for 3.5 million dollars that was completed almost instantly after the publication of Milei. However, what seemed like a meteoric ascent was soon revealed as a classic “pump and dump” scheme: in less than an hour, the price of $ Libra collapsed to cents, generating millionaire losses for off guard.
Ignored warning signals
As the issue won traction in social networks and specialized media, details began to emerge that questioned the legitimacy of the project. The $ Libra website had been created on the same day of the ad, the application to participate in the initiative consisted of a simple Google form, and the contact mail was recorded in a Gmail account. These alert signals, common in digital scams, were not enough to stop the speculation unleashed after the initial support of the president.
Those doubts and the behavior of the digital currency made many ask in the networks but it was a hacking in the president’s account, but different official sources confirmed the veracity of the post, even the Bloomberg news agency published that the president himself himself confirmed the project.
In the midst of the growing controversy and four hours later, Milei published a second message in which he recognized his initial support for the project, but also tried to disconnect from the scandal. “I was not internalized from the details of the project and after having internalized I decided not to continue disseminating (that’s why I erased the tweet),” the president explained. However, by then, the damage was already done.
Suspicious patterns and actors involved
Preliminary investigations on the distribution of tokens revealed that most of the original $ Libra holdings were concentrated in just four wallets, which suggests a premeditated strategy to inflate their value and then liquidate positions at the expense of retail buyers. It is estimated that the creators of the Token managed to pocket between 80 and 100 million dollars before the price drop.
The post was several hours in the president’s social network X, his veracity was confirmed by other members of the Government, even by himself to a financial news agency, and that has been launched on Friday afternoon after the closure of the Markets and with a holiday in American markets on Monday is an extremely important fact because it seeks to minimize the impact of what happened in the rest of the Argentine assets.
Additionally, American rapper and businessman Kanye West revealed that he had recently offered him to participate in a similar operation in exchange for 2 million dollars, indicating that the strategy behind $ Libra could have been underway for a long time.
Consequences for government and markets
The impact of this episode could transcend individual financial losses and affect the credibility of the Milei government, which already faces multiple economic and political challenges. The promotion of a fraudulent cryptocurrency by a head of state not only erodes the trust of investors, but could also attract the scrutiny of international regulatory organizations.
In the short term, the market reaction could be limited due to the holiday in the United States on Monday following the incident. However, the behavior of Argentine bonds and actions in the subsequent days will provide a clearer measure of the real impact, but it would not seem that the event can arouse a SELL OFF about Argentine assets.
As for financial dollars, there could be an increase in demand, which would force the Central Bank to a greater intervention, although without a significant deviation of the recent trend. The event happened on Friday, and although it was the main topic all weekend, the Crypto dollar remained stable near Friday’s closure prices.
Final reflections
The $ Libra episode is a forceful reminder of the risks inherent to a crypto market that, although it offers investment opportunities, is also plagued with traps for the unsuspecting. In this case, the apparent lack of diligence of President Milei in the promotion of a suspicious project hits the credibility that has tried to generate during these 14 months of management.
While investors assimilate losses and investigations, a key question persists: was this a monumental trial or there was a degree of collusion with the actors behind the scheme? The answers to this question could have repercussions that go far beyond the financial markets and affect the political landscape of Argentina in the coming months.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
