Javier Milei’s crypto misadventure

Javier Milei is facing his presidency’s first big scandal. On February 14th he posted on X, a social-media service, in praise of a cryptocurrency called $LIBRA, saying it would fund “small companies and Argentine ventures”. Thousands of people bought in over the next hour. The price surged from 21 cents at the time of Mr Milei’s post to peak at $5.54, then collapsed.

Most investors lost their shirts. Mr Milei deleted his post. By February 17th more than 100 criminal complaints had been filed against him alleging fraud. Argentina’s opposition party was calling for his impeachment.

The president has tried to distance himself from the project, insisting that his post did not constitute an endorsement. He has said he acted in good faith and was “not familiar with the details”. Awkwardly, his office says he routinely endorses businesses.

One of $LIBRA’s backers, a marketeer called Hayden Davis, was part of a team that launched a cryptocurrency promoted by Melania Trump, America’s First Lady, in January. That coin lost 90% of its value within days. On February 15th Mr Davis called himself “Javier Milei’s adviser” and said that he was “working with him and his team”. Mr Milei’s office has said the government has no connection to Mr Davis.

This was not Mr Milei’s first brush with crypto controversy. In 2021 he promoted a company called CoinX World on Instagram. It was later shut down by Argentine regulators.

It seems that insiders may have profited from prior knowledge of Mr Milei’s post. According to the Buenos Aires Herald, one wallet bought $1m of the coin at the exact moment of Mr Milei’s post. The wallet sold 45 minutes later, netting a profit of $8.5m.

The president may have been emulating his idol, Donald Trump, who launched a cryptocurrency in January (its value also cratered). Mr Milei has also followed Mr Trump’s lead in announcing Argentina’s withdrawal from the World Health Organisation. He is mulling leaving the Paris climate accords. The $LIBRA saga shows that not all MAGA mimicry is a sure bet. ■

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