IA «FACT» already wrote that the president of Argentina, Javier Millais, known for his eccentric management methods, found himself at the center of a large-scale scandal due to the promotion of the $Libra cryptocurrency, promising that it would become a lifeline for the Argentine economy. «Radical economist-libertarian«, it seems, cannot refrain from radical financial experiments, in the crypto market in particular, especially since the first persons of the neighboring superpower have set the corresponding trend — to launch nominal cryptocurrencies, swinging crypto-enthusiasts on a “roller-coaster”.
After the launch of the cryptocurrency he sponsored on Valentine’s Day, Miley published in the X social network, a message in which he called this private project a means of stimulating economic growth in Argentina and supporting small businesses. This led to an instant increase in the value of the token, but a few hours later, its price plummeted, causing significant losses for investors.
After a sharp drop in the value of the Miley token deleted his publications and stated that he was not aware of the details of the project. Despite this, the opposition filed legal complaints accusing him of fraud and dereliction of duty.
Cryptogate: Who plays with fire risks getting burned
This precedent illustrates the old truth: with great power comes great responsibility. The point is that $Libra is a meme cryptocurrency not backed by real assets. Its value depends on the support of well-known persons who are able to attract investors and increase capitalization. However, the economist Miley presented $Libra as a serious project, which caused an instant increase in its price.
He who plays with fire risks getting burned. Federal judge accused Miley in creating an «illegal association» to commit a massive fraud that misled 44,000 people and resulted in total losses exceeding $4 billion. The US Department of Justice also received a request to investigate possible «criminal operations» in this case.
After the exposure of a possible fraud with $Libra, the Argentine stock market experienced significant losses. The S&P Merval index fell 4.7%, while government bonds fell 0.5%. This indicates the loss of investors’ confidence in the market and the country’s political leadership.
One of the initiators of the project and an adviser to the president called the situation an «experiment that did not go according to plan.» He too admitted, who made a profit of $110 million from the project and expressed fear for his life due to numerous threats.
Opposition politicians accuse Miley of involvement in a financial scam and demand his resignation through impeachment proceedings. The president himself is trying to distance himself from the scandal, claiming that he was not familiar with the $Libra project in detail. However, his initial public endorsement of the cryptocurrency sparked outrage among investors and the international community.
The situation led to a political crisis in Argentina and negatively affected the country’s international image. Shares of leading Argentine companies opened lower, indicating a loss of investor confidence. This scandal, which has already received the name «Cryptogate», also affected part of Miley’s most loyal base of supporters — young crypto-investors known as «cryptobros». They feel betrayed and disappointed by the president’s actions.
In addition, American citizens were also among the victims, so the US Ministry of Justice and the FBI started own investigations into possible violations of US law in connection with this incident.
Despite the scandal, US President Donald Trump expressed Miley’s support by posting a quote on social networks: «If printing money will end poverty, then printing diplomas will end stupidity«. This message was retweeted by Miley and his entourage. It is likely that Trump’s support could influence the course of investigations and further developments, adding a new dimension to the already complicated situation surrounding $Libra. Investigations are ongoing, and further developments could have serious consequences for the political and economic situation in Argentina.
President Miley faces impeachment over $Libra collapse
So, young crypto-enthusiasts who trusted the president and his promises of economic innovation, feel themselves betrayed. They invested their savings, hoping to support the national economy, but instead faced financial losses and disappointment.
In response to the scandal, protests were held in Buenos Aires and other cities. Citizens express distrust of the government and demand responsibility for financial losses. Opposition politicians are calling for the impeachment of President Miley, accusing him of facilitating financial fraud and possible involvement in the “rug pull” scheme, where the value of a crypto-asset is artificially inflated and then plummets after the founders withdraw funds.
Former president Cristina Fernández de Kirchner and other Latin American leaders also condemned Miley’s actions, underscoring the seriousness of the situation and the possible impact on Argentina’s international reputation. In response, the administration of the president denies his participation in the development of cryptocurrency and initiated an anti-corruption investigation to clarify the circumstances of the incident.
Economic experts warn, that this scandal could have long-term negative consequences for Argentina’s economy. A decline in investor confidence may reduce foreign investment and make access to international financial markets more difficult. The political instability caused by this incident could exacerbate economic problems and affect the government’s ability to implement reforms.
It is obvious that the president’s involvement in questionable financial arrangements undermines confidence in Argentine institutions and may negatively affect future negotiations with international creditors. This can increase the cost of borrowing and limit the country’s economic opportunities.
The investigation revealed conflicts of interest among the project organizers. Check whether privileged information channels were used for personal gain. It is suspected that some people close to the project management had access to insider information that allowed them to avoid financial losses or profit during the collapse of $Libra. Obviously, such actions undermine trust in the project and call into question the ethics of its organizers.
Trump and Miley crypto scandals: Political leaders under fire for collapse of their own cryptocurrencies
Everyone remembers Trump’s January prank, when a few days before the inauguration he launched his cryptocurrency $TRUMP. Initially, the token became very popular and its price quickly increased to $75. However, the price soon fell by 75% to $15.78. As a result, more than 200,000 investors lost together more than $2 billion. The Trump family and their associates earned nearly $100 million in trading fees, while most investors suffered significant losses.Trump faced with accusations of corruption and conflict of interest over $TRUMP’s launch, undermining the credibility of his administration.
In Miley’s case, his support is $Libra caused political crisis in Argentina and threatened his presidency. Both cases show how political leaders can use their influence to promote dubious financial projects, leading to serious problems for investors.
These events highlight the need to implement a number of measures to prevent similar situations in the future. The lack of clear rules makes it possible to use cryptocurrencies for fraud. It is important to create laws that define the legal status of digital assets, the rules of their circulation and liability for violations.
So, in December of last year, Trump founded the cryptocurrency company World Liberty Financial. It caused concerns over possible conflicts of interest and the possibility of financing terrorist organizations through a partnership with the Tron platform, which has previously been associated with illegal transactions.
Many investors have suffered losses because they did not fully understand the risks associated with cryptocurrencies. Educational campaigns and providing reliable information about financial instruments will help people make the right decisions and avoid fraud. It is necessary to create institutions that will quickly respond to cases of fraud and provide legal assistance to victims.
Cryptocurrency transactions know no borders, so states need to cooperate by sharing information and conducting joint investigations to effectively combat international financial crimes. In the case of $Libra, to the investigation joined FBI, because among the victims were American citizens.
Argentina is one of the leaders in the adoption of cryptocurrencies in Latin America, in large part due to economic instability and currency restrictions. This has prompted citizens to turn to digital assets to protect their savings. In response, the government introduced a number of regulatory measures:
Yes, Argentina last year strengthened requirements for virtual asset service providers by introducing mandatory licensing and compliance with Know Your Customer and anti-money laundering procedures. This is aimed at increasing the transparency and security of transactions with cryptocurrencies.
Argentina actively cooperates with other countries in the field of cryptocurrency regulation. Last May, the National Securities Commission of Argentina held a meeting with the National Commission of Digital Assets of El Salvador to discuss the introduction and regulation of cryptocurrencies in both countries. It was done as part of the fight against money laundering and terrorist financing. However, these measures have proven insufficient to prevent large-scale frauds such as the $Libra case.
… The scandals surrounding the cryptocurrency initiatives of the presidents of Argentina and the United States have exposed deep ethical dilemmas and conflicts of interest in the highest circles of power. Both leaders have found themselves at the epicenter of financial storms over their ties to cryptocurrencies, leading to significant losses for investors and questioning their political accountability.
Tetyana Viktorova
