Milei Axes LIBRA Scam Probe as Judge Unseals Bank Records

On May 19, 2025, Argentine President Javier Milei signed a decree to dissolve the Investigative Task Force (UTI), a special unit formed to probe the controversial LIBRA memecoin scandal that has rocked the nation’s crypto scene and his administration. The decision, announced via a joint statement with Justice Minister Mariano Cúneo Libarona, comes just days after Federal Judge María Servini ordered the unsealing of bank records belonging to Milei and his sister, Karina Milei, intensifying scrutiny over their alleged ties to the failed Solana-based token.

The LIBRA Scandal: A Brief Recap

The LIBRA memecoin, launched in early February 2025, gained significant attention after President Milei promoted it on his official X account, describing it as a private initiative to support Argentine small businesses and startups. The token’s market capitalization surged to $4.5 billion within hours, driven by hype and retail investor enthusiasm. However, it plummeted over 90% in value shortly after, wiping out an estimated $250 million in investor wealth and affecting approximately 75,000 wallet holders.

Amid the controversy, President Javier Milei deleted his promotional tweet about the LIBRA memecoin and claimed he had no knowledge of the project’s underlying technology. He attributed the incident to a ploy by political opponents to undermine his administration.

In a television interview with Todo Noticias, Milei firmly denied any wrongdoing, asserting that he merely shared information about a project aimed at helping entrepreneurs access financing options. “I acted in good faith and was unfairly targeted,” he said, according to a translation of the interview. Milei claimed that “at most” 5,000 people were affected, with the vast majority being Chinese and American citizens. “Did the State lose money? No. Did Argentinians lose money? Maybe four or five at most. The vast majority of investors are Chinese and American,” he added.

The rapid rise and fall of LIBRA triggered allegations of a pump-and-dump scheme. Hayden Davis, the self-proclaimed facilitator of LIBRA, further fueled controversy by alleging he paid Milei’s sister to secure the president’s endorsement, a claim that remains under investigation.

Dissolution of the Task Force

The UTI, established on February 19, 2025, was tasked with investigating Milei’s and his associates’ connections to LIBRA amid accusations of insider trading and market manipulation.

On May 20, 2025, Milei and Justice Minister Mariano Cúneo Libarona jointly signed a statement to disband the Investigative Task Force (UTI), declaring it had “fulfilled its purpose.” The decision to dissolve the unit has drawn criticism from opposition lawmakers and the public, who view it as an attempt to halt scrutiny of alleged market manipulation. Local media outlet Clarin reported that opposition groups are pushing for a congressional investigative committee to continue the probe, citing concerns over transparency。

Judicial Developments and Ongoing Investigations

Despite the task force’s closure, the LIBRA scandal remains far from resolved. On May 14, Judge María Servini ordered a 90-day asset freeze on key figures tied to LIBRA, including Mauricio Novelli, Manuel Terrones Godoy, and government official Sergio Morales, to prevent the transfer of properties or vehicles during the investigation. Additionally, Servini mandated the unsealing of bank records for both Javier and Karina Milei to examine potential financial irregularities.

The judicial probe has uncovered troubling allegations. Local outlet Página12 reported that prosecutors are reviewing video evidence of a LIBRA co-founder’s family members emptying bank safe-deposit boxes the day after Milei’s promotional post, raising suspicions of coordinated efforts to obscure financial trails.

Broader Implications and Looking Forward

The dissolution of the UTI has not halted the broader investigation into LIBRA. The congressional committee, approved on April 8, 2025, by Argentina’s Chamber of Deputies, continues to summon officials, including the economy and justice ministers, to testify. Opposition lawmakers, such as Sabrina Selva, have criticized the exclusion of Milei and his sister from direct congressional scrutiny, demanding their testimony for transparency.

The token’s collapse has significantly eroded public trust in Milei’s administration, with polls indicating nearly 60% disapproval following the scandal. As Argentina grapples with economic challenges and the fallout from “CryptoGate,” the LIBRA scandal underscores the risks of intertwining political influence with volatile crypto markets. The ongoing judicial probe, coupled with public and congressional pressure, will likely keep this issue in the spotlight, with implications for Milei’s presidency and Argentina’s crypto ecosystem.

The LIBRA scandal has sparked broader discussions about the risks of celebrity endorsements in crypto space. From Melania Trump’s $MELANIA memecoin to Milei’s backing of $LIBRA and Japanese adult film star Yua Mikami’s $MIKAMI, celebrity-linked tokens have consistently ended in alleged rug pulls, resulting in significant losses for investors. These incidents highlight the exploitation of public figures’ fame and fanbases for financial gain, underscoring the need for clearer regulatory frameworks governing such activities.