LIBRA Crash Fallout: Argentina’s Anti-Corruption Office Clears Milei of Misconduct

Argentine President Javier Milei has officially been cleared of misconduct allegations surrounding his promotion of the LIBRA memecoin, bringing an end to weeks of public debate and media scrutiny.

The ruling came in the form of a resolution issued by Argentina’s anti-corruption office on Friday, which argued that the president acted in his personal capacity as an economist and not a public official when endorsing the Solana-based LIBRA meme coin earlier this year.

The controversy erupted in February when President Milei tweeted from his personal X (formerly Twitter) account about LIBRA, presenting it as a tool to help small and medium-sized enterprises in Argentina raise capital more efficiently. At the time, the meme coin quickly surged to a $4.5 billion market capitalization, fuelled largely by Milei’s endorsement.

However, within hours of the tweet, he deleted the post, claiming he had not fully understood the project’s details. This triggered a market collapse that saw LIBRA lose over 90% of its value, effectively wiping out more than $4 billion in investor capital.

Rationale Behind the Clearance

According to the resolution signed by Alejandro Melik, the head of Argentina’s anti-corruption office, President Milei’s actions did not violate ethical or legal standards tied to his office.

The argument emphasized that Milei’s personal social media account had existed well before he took public office, thereby drawing a line between his personal commentary and official presidential duties. The office ruled that the LIBRA memecoin endorsement was made in a personal and economic capacity.

The LIBRA meme coin was positioned as a decentralized solution aimed at bridging capital gaps for Argentine businesses, and Milei, known for his libertarian and pro-crypto stance, appeared to align ideologically with the project. Despite the good intentions framed around the tweet, the outcome painted a much darker picture for investors.

LIBRA Meme coin: From Surge to Collapse

In the immediate aftermath of the tweet, LIBRA meme coin experienced a meteoric rise, peaking with a market capitalization of approximately $4.5 billion. Investor optimism was fueled not only by Milei’s economic credentials but also by the growing trend of political figures endorsing blockchain innovations.

However, the crash that followed erased much of the gained enthusiasm. On-chain data from blockchain analytics firm Nansen showed that 86% of participating traders suffered losses totaling $251 million. Meanwhile, only a small group of early movers walked away with profits estimated at $180 million. This extreme volatility and uneven wealth distribution added fuel to the public outcry and raised suspicions about potential insider dealings.

Ethics Under Scrutiny

The ethical debate intensified after leaked text messages alleged that Hayden Davis, co-creator of the LIBRA meme coin, had been boasting about his influence over President Milei. These messages reportedly referenced payments made to Karina Milei, the president’s sister and a prominent political figure in his administration. While these claims have not been legally substantiated, they did spark concerns regarding the transparency and integrity of the political and financial links behind the LIBRA memecoin.

Despite these troubling revelations, the anti-corruption office maintained that there was no direct evidence tying the president’s LIBRA meme coin endorsement to any financial benefit or conflict of interest. The decision effectively protects President Milei from legal consequences, though it may not fully absolve him in the eyes of the public.

Regulatory Landscape and Political Fallout

The LIBRA meme coin debacle also raised questions about the role of government officials in endorsing high-risk financial products, especially in volatile markets like cryptocurrency. The incident has spurred calls within Argentina’s legislature to draft clearer guidelines and ethical standards around cryptocurrency endorsements by public figures.

Although the anti-corruption office’s resolution shields President Milei from legal repercussions, the political fallout remains significant. Public confidence, especially among the more than 200,000 retail investors who suffered financial losses, is severely shaken.

Lawmakers from opposing parties have already signaled their intent to introduce legislation that would prevent similar incidents in the future, including a Crypto Endorsement Disclosure Act.

Market Reactions and Aftermath

Since the controversy began, the LIBRA meme coin has struggled to recover. Its market cap has dwindled to under $500 million as of early June 2025, a far cry from its February peak. Trading volumes remain depressed, and community sentiment is largely negative, with many investors alleging misleading promotion and inadequate due diligence by those in power.

Meanwhile, Hayden Davis and other LIBRA memecoin developers have kept a low profile, declining interview requests and releasing only sparse updates via social media. Analysts suggest that unless new partnerships or product developments emerge, the LIBRA meme coin may never fully regain its credibility in the market.

Conclusion: LIBRA Memecoin Scandal Leaves Lingering Questions

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While the anti-corruption ruling clears President Milei of any formal misconduct, the LIBRA meme coin scandal has exposed deep flaws in the intersection of politics and decentralized finance. Though he may have spoken as an economist, Milei’s role as the nation’s highest public servant inevitably lends weight to his words, particularly in a volatile market.

The LIBRA meme coin collapse, fueled by one influential tweet and further complicated by rumors of insider connections, serves as a cautionary tale. It highlights the urgent need for transparency, accountability, and regulatory frameworks in an industry still largely driven by hype, sentiment, and speculation.

Until such standards are in place, retail investors will remain vulnerable to similar situations, and public officials will continue to walk a fine ethical line in a world where financial markets can be moved by a single social media post.

FAQs

What is the LIBRA meme coin?

The LIBRA memecoin is a Solana-based cryptocurrency promoted as a tool to help Argentine businesses access capital but became controversial after a sudden market crash.

Why was President Milei cleared of wrongdoing?

He was found to have acted in his personal capacity as an economist, not in his official role, according to Argentina’s anti-corruption office.

How much did investors lose in the LIBRA crash?

Traders lost over $251 million, with the coin’s market cap dropping by more than $4 billion within hours.

What are the political consequences of the LIBRA meme coin scandal?

While Milei avoids legal punishment, the incident has prompted discussions about crypto regulations and public figure endorsements in Argentina.

Glossary

LIBRA Memecoin – A Solana-based cryptocurrency promoted as a financial tool but suffered a massive crash after initial hype.

Market Capitalization – The total value of a cryptocurrency, calculated as the current price multiplied by the circulating supply.

Anti-Corruption Office – A government body responsible for ensuring public officials adhere to ethical standards.

On-Chain Data – Information recorded on a blockchain that provides transparency into transactions and wallet behavior.

Double Bottom Pattern – A technical chart formation suggesting a potential price rebound after two similar price dips.

Sources

Cointelegraph

Cryptoslate

Research.nansen

Bezinga

Ainvest