BUENOS AIRES (AP) — It was 7:01 PM on February 14 when Argentine President Javier Milei hit the publish button on his profile on X, formerly Twitter, and shared a message that has resulted in the most scandalous event of his term that began over a year ago.
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The post promoting the cryptocurrency $LIBRA on social media, which at the time garnered a large part of the popular support that brought him to power, opened a legal battle with unpredictable consequences for the far-right leader. It also began to sour social mood, eroding the backing he had been counting on.
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Milei promoted a cryptocurrency with the name of his zodiac sign that was meant to “encourage the growth of the Argentine economy by funding ventures.” The value of $LIBRA quickly skyrocketed, almost quintupling.
But hours later, the first holders of the digital currency who apparently had access to insider information about the launch began to withdraw their investments and the price plummeted. Approximately 100 million dollars were withdrawn by a few wallets, which are a kind of bank accounts in that digital ecosystem.
What is the legal issue that Milei is facing?
The dissemination of $LIBRA through a tweet, which was pinned on the account @JMilei with 3.8 million followers, ended up leading to a judicial investigation for an alleged multimillion-dollar scam affecting more than 40,000 investors and placed the leader of La Libertad Avanza under scrutiny by the Argentine justice system and U.S. authorities. It also triggered a complaint against him in Spain.
A investigation in the Argentine federal court is trying to determine if the president and individuals related to the launch of the cryptocurrency committed crimes of fraud, abuse of authority, influence peddling, and bribery.
Among those being investigated, at the request of dozens of complaints in the hands of prosecutor Eduardo Taiano, is the American Hayden Mark Davis, a 28-year-old entrepreneur who provided the technological infrastructure for the creation of $LIBRA. Since October, he met with Milei in Buenos Aires at least twice.
Davis says to have helped launch a coin referring to the First Lady of the United States, Melania Trump, in January. Its value had a trajectory similar to that of $LIBRA: it shot up quickly and then fell.
The United States Department of Justice also opened an investigation to determine if there was transnational fraud.
Furthermore, the Burwick Law firm filed a lawsuit on behalf of around 200 victims from various countries before the New York Supreme Court. Milei is mentioned several times in the document but is not among the accused.
In Spain, Milei and Davis were reported by deputy Gerardo Pisarello to the Public Prosecutor’s Office of the National Court.
The image of Milei is falling in Argentina
The scandal also represents an unexpected blow to the ruling party ahead of the October legislative elections, where it aims to increase its presence in Congress. Today, La Libertad Avanza is in the minority in both chambers and must negotiate key projects with occasional allies.
Milei, a disruptive economist who rose to power at the end of 2023 railing against “corrupt castes,” is being investigated as a possible scammer.
A study by the consulting firm Analogías in late February indicated that 61% of those surveyed believe it is a case of corruption and 54.6% think the president was involved in the scam. His positive image dropped three points to 49.7%, while the negative image increased by 2.5 points, closing at 47.9%. The study covered 2,733 cases.
A March survey by Synopsis with 1,680 cases reveals a darker outlook. 57.5% have a negative image of Milei, 5.2 percentage points more than shortly before the scandal broke out. 38.4% have a positive image, representing a 4.8-point drop.
According to the same study, the ruling party remains in first place in the intention to vote for the legislative elections, but its support has dropped by about three percentage points to 36.4%.
That electoral support was largely bolstered by the weakness of a political opposition that lacks a clear leader and the perception of greater macroeconomic stability due to achieving a fiscal surplus after years of deficits and a slowdown in inflation. In 2023, prices rose by 211.4%, while 2024 saw an increase of 117.8% after the first year of the ultra-liberal administration.
In the province of Buenos Aires, the most populated and with the highest electoral weight, the negative image of the leader is 43.8% and the positive one is 39.2%, according to a survey by Circuitos conducted between March 7 and 10 with 1,282 people.