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Discover the full story behind the $LIBRA token scandal that shook Argentina in 2025. Learn how Javier Milei’s image fueled a crypto rug pull, who was behind it, what happened to the stolen funds, and the latest on legal investigations...
Author: Sahil Thakur
Published On: Thu, 21 Aug 2025 04:31:32 GMT
In early 2025, a crypto scandal erupted in Argentina that shook both the financial and political arenas. A new token called $LIBRA was publicly promoted using the image and endorsement of Argentine President Javier Milei, generating massive public interest. Within hours, tens of thousands had invested, believing the token to be a state-sanctioned economic project. But the hype turned to outrage as $LIBRA collapsed, wiping out millions in value and prompting legal investigations both in Argentina and the United States.
This article details the origins of the scam, how Milei became entangled in it, how it operated, the political and legal consequences, and the controversial unfreezing of associated funds.
The saga began on Valentine’s Day, February 14, 2025 – when President Javier Milei posted from his verified social media account, promoting a token named $LIBRA. The message described it as a “private project,” meant to stimulate Argentina’s economy by financing small businesses and entrepreneurs. He urged, “The world wants to invest in Argentina. $LIBRA.”
Unexpectedly, the post included a direct blockchain contract address, not a website or whitepaper or traditional exchange listing. Buyers had to manually import the token into a digital wallet and swap using crypto on a Solana-based decentralized exchange. That meant even interested investors needed a degree of crypto familiarity, this wasn’t click-and-buy. This is really important since this shows the target audience: It wasn’t directly retail.
Nevertheless, the presidential seal of approval gave it instant credibility. Never before had the head of a state endorsed a token this way, NFTs sure, but not a token; not until then. That alone turned a complex, fringe digital venture into a tidal wave of investor interest. Many Argentines, fed up with inflation, currency controls, and economic stagnation, saw this as their chance to support a private economic revival in tune with the libertarian, pro-crypto ethos Milei championed.
The power of imagery cannot be overstated here. Milei’s verified account, his recognizable persona, and slogans like “Viva la Libertad” turned the token promotion into what felt like a quasi-official economic initiative. The suggestion was clear: investing in $LIBRA wasn’t just profitable, it was patriotic.
Promotional materials amplified this: visual overlays of Milei’s face, framed as an endorsement, evoked the idea that the token would fuel local startups and economic freedom. It was a powerful narrative.
Even though Milei later claimed he had no official role, merely sharing what he thought was a private opportunity, the damage had been done. A photo emerged showing Milei meeting Harmlessly with one of the token’s architects, Hayden Mark Davis in person before the launch, blurring the line between casual interest and complicity.
At its core, $LIBRA was a memecoin rug pull, a deceitful scheme where developers launch a token, hype it, pump the price, then pull liquidity and exit with the profits, leaving investors holding worthless tokens.
Here’s how it played out:
Though the infrastructure, smart contracts, Solana, decentralized exchanges, sounds technical, the scam was simple in essence: pump and dump with a political twist.
As $LIBRA’s price plummeted, outrage erupted. Milei quickly deleted the original tweet and issued a public statement disavowing the project entirely. He said he had merely shared what he thought was a legitimate, private initiative, without due diligence or knowing the risks involved.
He insisted he had no financial or operational role, simply reacted impulsively, and that critics were using the collapse to attack him both politically and personally.
It wasn’t his first crypto-related stumble,he had previously endorsed CoinX, later shut down, and another NFT gaming token that crashed to zero. Those earlier missteps added fuel to the backlash, suggesting a pattern of uncritical crypto promotion by the president who cast himself as anti-corruption and anti-establishment.
“Cryptogate” became a catchphrase. Opposition lawmakers accused Milei of either negligent recklessness or deliberate complicity. Multiple impeachment motions were introduced, but none advanced. Still, they stoked public scrutiny.
Instead, the lower house formed a special investigative commission. Government officials were summoned, but notably, Milei and his sister Karina were exempt. That was odd, especially because it came to light that Karina had met with $LIBRA’s organizers too.
To show transparency, Milei set up a Special Investigative Task Unit under the presidency. Yet, he later quietly dissolved the unit, claiming it had completed its mission. Skeptics saw this as a cover-up rather than a closure.
Federal prosecutors opened criminal investigations, not just into the scammers, but into possible ties between them and the president’s circle. Key figures under scrutiny included Argentine businessmen who connected organizers with Milei’s team, and even one of Milei’s advisers who resigned amid revelations of prior connections.
A judge issued orders to freeze assets (bank accounts, properties, cars) of key individuals. Banking secrecy for Milei and Karina were also lifted to allow investigators to examine their finances. Authorities pursued international cooperation, and even issued an Interpol notice for Hayden Davis.
Meanwhile, dozens of foreign investors formed a class-action lawsuit in New York, accusing the $LIBRA organizers (including Hayden Davis and others) of fraud, conspiracy, racketeering, and unjust enrichment. The suit referenced a meeting at Argentina’s presidential palace—raising uncomfortable questions about Milei’s awareness.
A U.S. judge granted a temporary restraining order, freezing around $110 million in crypto assets,most notably, $57.6 million in USDC stablecoins. This freeze was enforced with the help of the stablecoin issuer, who locked the funds on-chain.
In August, the judge in New York lifted the freeze, permitting Hayden Davis and associates to access the $57.6 million. The judge ruled that plaintiffs hadn’t demonstrated “irreparable harm” while preserving that the funds remained intact and untouched.
However:
Critics argue that once unbound, the funds could be moved or hidden, making restitution more difficult.
Officials continue to sift through credit records, surveillance footage, and international leads. Reports surfaced of safety deposit box removals and cash movements right after the launch. Milei denies personal gain, but the probe is far from over.
The U.S. lawsuit barrels on. While the asset freeze is lifted, plaintiffs are continuing to press fraud and racketeering charges. If successful, investors could still see recovery through judgments, asset seizure, or negotiated settlements.
Crypto endorsement rules are under scrutiny. Lawmakers are discussing mandates for disclosures or vetting when public figures promote financial products. The $LIBRA case has served as a potent example of the real-world stakes in digital finance.
$LIBRA isn’t the first. Other tokens riding celebrity or political image like “$TRUMP” or TV show-themed coins have similarly surged and collapsed. Authorities are watching for networks behind $LIBRA to reappear under new schemes.
Hayden Mark Davis, 28, is a tech entrepreneur from the U.S. He was the CEO of Kelsier Ventures, the company behind the $LIBRA token. Before the controversy, he was mostly unknown. In 2025, he became the face of a major crypto scandal.
Davis claimed he met President Javier Milei at the presidential palace in 2024. He said Kelsier Ventures had arranged an official $LIBRA promotion with Milei’s team. When the endorsement disappeared, Davis called it a betrayal. He said the deal had been formally agreed with the president’s office.
He denied being a scammer. He said he was a “launch advisor” and held about $100 million in crypto tied to $LIBRA. He claimed he planned to reinvest it, not use it for personal gain. He insisted the project wasn’t a “rug pull,” just an attempt at innovation that didn’t work out.
Davis also made bold claims. He reportedly said he could influence politics by bribing Karina Milei, the president’s sister. He gave no proof and denied making any payments.
Legal trouble followed. Argentine courts pushed for prosecution. U.S. courts froze his assets, $57 million in USDC and more in $LIBRA tokens. Some funds were later released under supervision.
Davis still defends himself. He says the project was real. He says he acted in good faith. He blames the collapse on lost support, not fraud. Also called $LIBRA a speculative memecoin and questioned whether New York courts had any right to judge the case.
