Argentina’s Stock Market Plunges Amid President Javier Milei’s LIBRA Memecoin Scandal

Argentina’s stock market suffered a sharp decline following allegations of President Javier Milei’s involvement in a cryptocurrency scandal, sparking legal and political fallout.

According to Reuters, the S&P Merval index dropped more than 5% after Milei publicly endorsed the LIBRA memecoin, a Solana-based asset that collapsed shortly after reaching a $4.5 billion market capitalization.

LIBRA Memecoin: From Presidential Backing to Collapse

On February 14, President Milei promoted LIBRA as an economic initiative for Argentina, lending credibility to the project. However, within hours of its launch, the token’s price plunged 95%, wiping out billions in investor funds.

The sudden collapse triggered allegations of insider trading and fraud, leading Milei to distance himself from the project. However, legal and political consequences were already unfolding.

Insider Trading Allegations Surround LIBRA

Blockchain analytics firm Lookonchain reported questionable activities linked to LIBRA’s launch, including insider trading and price manipulation by the token’s creators.

• The team behind LIBRA reportedly withdrew $107 million before the price crash, accelerating its collapse.
• Three insider wallets allegedly manipulated the launch, securing $6.65 million in profits before retail investors could react.

Notably, Barstool Sports founder Dave Portnoy was also entangled in the scandal.

Lookonchain identified an insider wallet connected to Portnoy, suggesting he had early access to information about LIBRA’s launch. However, Portnoy denied these claims, stating he was not part of any pre-sale and instead lost $5.34 million from his investment.

In response, LIBRA’s developers allegedly compensated Portnoy with $5 million in USDC.

Portnoy later revealed that he had initially received 650,000 LIBRA tokens but returned them over concerns about the project’s lack of transparency.

He also accused Kelsier Ventures CEO Hayden Davis, a key player in LIBRA’s launch, of falsely assuring him that Milei actively supported the project.

“I didn’t buy early or as an insider. I bought 10 minutes or so after Milei tweeted. I woulda bought 10 milly if I could have. That’s how sold I was on this,” Portnoy stated.

Further blockchain investigations by Bubblemaps revealed a wallet used in MELANIA token sniper trading was linked to LIBRA’s launch. This address reportedly profited $2.4 million from MELANIA before funneling those funds into LIBRA’s development.

Bubblemaps concluded:
“The creator of MELANIA / LIBRA not only launched tokens to extract value but used insider knowledge to snipe them, making over $100M on LIBRA alone.”

Legal and Political Fallout for Milei

The LIBRA scandal has triggered serious legal and political consequences for President Milei.

Critics argue that his endorsement misled investors and severely damaged Argentina’s credibility in global financial markets.

• Fraud charges have reportedly been filed against Milei, accusing him of playing a role in the misleading promotion of LIBRA.
• Kelsier Ventures and CEO Hayden Davis are also facing legal action, accused of orchestrating a large-scale fraudulent scheme.

Meanwhile, the Argentine government has launched an official investigation into LIBRA’s collapse, aiming to determine whether government officials were involved in the token’s promotion or benefited from its failure.

As legal proceedings unfold, Milei faces mounting scrutiny over his handling of the situation, with the scandal further shaking investor confidence in Argentina’s financial landscape.