Argentine President Javier Milei has rejected allegations that he promoted the LIBRA memecoin, which recently crashed in a classic pump-and-dump scheme, leaving thousands of investors with significant losses. While he acknowledges mentioning the token, Milei insists he never encouraged people to invest, calling the controversy a private financial issue rather than a government matter.

Milei’s Response to LIBRA Controversy

President distances himself from accusations of financial misconduct

The controversy erupted after tier10k reported on X that Milei had publicly spoken about LIBRA before its rapid price surge and subsequent collapse. However, Milei argues that his involvement was limited to sharing information and that the impact on Argentina was minimal.

“I only mentioned the token; I never asked anyone to invest in it,” Milei stated, downplaying the issue by claiming that only four or five Argentine investors were affected, with most traders being from China and the U.S.

Contrary to reports suggesting that 44,000 investors suffered losses, Milei claims the actual number is closer to 5,000, primarily experienced traders who understood the risks. He maintains that the LIBRA scandal is a personal financial matter and not a governmental crisis.

Hayden Davis’ Role in LIBRA and Milei’s Connection

LIBRA’s creator envisioned financial accessibility, says Milei

Milei further clarified that Hayden Davis, one of LIBRA’s key figures, had pitched the token as a way to provide funding to entrepreneurs struggling in Argentina’s informal economy. According to Milei, he simply helped spread the word, believing the initiative could be beneficial.

Despite defending his stance, Milei admitted that the controversy has taught him a lesson about political perception and accessibility.

“I acted in good faith, but I realize now that as president, I need to raise my filters and avoid being so accessible,” he said, acknowledging the political backlash that followed.

Market Manipulation Allegations and Political Fallout

Did LIBRA insiders cash out before the crash?

LIBRA saw a meteoric rise from $0 to over $4 after Milei publicly mentioned it. However, the token’s price soon plummeted below $0.50, leading to accusations of insider trading and market manipulation. Reports indicate that early investors cashed out over $100 million, leaving retail traders with severe losses.

The political ramifications of the scandal have intensified, with opposition leaders calling for Milei’s resignation, accusing him of misleading the public. The Anti-Corruption Office of Argentina has launched a separate official inquiry, and Federal Judge María Servini is overseeing a legal probe into possible wrongdoing.

Economic Impact: Argentina’s Stock Market Reacts

LIBRA controversy shakes investor confidence

The LIBRA scandal has not only impacted retail investors but also rattled Argentina’s financial markets. Following the controversy, the S&P Merval stock index dropped by approximately 5%, reflecting investor uncertainty.

While Milei insists that he did nothing wrong, the ongoing scrutiny from regulators, political rivals, and financial watchdogs suggests that the debate is far from over.

Key Takeaways from the LIBRA Scandal

📌 Milei denies endorsing LIBRA, calling it a private financial matter.
📌 Hayden Davis presented LIBRA as a funding initiative, but its legitimacy is questioned.
📌 Market manipulation allegations surface, with insiders profiting over $100 million.
📌 Argentina’s stock market takes a hit, intensifying political tensions.