Il Messaggiere - Argentine prosecutors to probe Milei over 'cryptogate'

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Argentine prosecutors to probe Milei over 'cryptogate'
Argentine prosecutors to probe Milei over 'cryptogate' / Photo: Filippo MONTEFORTE - AFP/File

Argentine prosecutors to probe Milei over 'cryptogate'

Argentine prosecutors will investigate President Javier Milei for promoting a cryptocurrency that crashed, losing investors billions of dollars and prompting a flood of complaints, local media reported Monday.

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The federal prosecutor's office will examine whether Milei engaged in fraud or criminal association or was in breach of his duties when he praised the $LIBRA cryptocurrency on social media on Friday evening, according to news reports.

The currency's value soared then crashed, and Milei deleted his blessing hours later, admitting he had made a mistake.

Argentine economists, crypto specialists and opposition political figures criticized self-declared "anarcho-capitalist" Milei, an economist by training, and said the digital asset could be a fraud or Ponzi scheme.

Industry observers said the operation was likely a "rug pull" -- a scam where developers unveil a crypto token, attract investors, then quickly cash out.

Rights NGO Observatory for the Right to the City, one of several complainants, alleges Milei formed part of a "criminal organization that organized a fraud with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with losses of more than $4 billion."

The Kobeissi Letter publication, which provides analysis on global capital markets, said on X Friday that within minutes of its launch, "multiple large holders began liquidating MILLIONS of USD worth of $LIBRA."

"This included gains of +$4 million or more as $LIBRA rose to $4.6 billion in market (capitalization)," it reported.

Milei later said he did not know "the details of the project and after learning about it, I decided not to continue promoting it."

He added he had "obviously no connection" with the "alleged private company."

Nevertheless, former president and opposition figure Cristina Kirchner called Milei a "crypto-scammer" and opposition parliamentarians announced they will institute impeachment proceedings against him.

Other parties are seeking the creation of a special parliamentary commission to question Milei.

- Improper conduct? -

The main stocks on the Buenos Aires Stock Exchange opened nearly four percent lower on Monday -- a public holiday in the United States with markets there closed.

The presidency on Saturday announced that Argentina's Anti-Corruption Office will be tasked with determining whether any improper conduct occurred.

It would also create a task force to carry out an "urgent investigation into the launch of the cryptocurrency $LIBRA, and all companies or individuals involved."

The prosecutor's office will also look into Julian Peh -- the CEO of companies that participated in the creation of $LIBRA -- as well as Chamber of Deputies president Martin Menem, who had reposted Milei's original endorsement.

L.Sabbadin--IM