Argentina’s President Javier Milei is facing serious challenges after a significant cryptocurrency scandal that emerged in February. Earlier this year, Milei celebrated victories over hyperinflation, but this incident has cast a shadow over his administration.
Milei, who identifies as an anarcho-capitalist, has long been linked to the cryptocurrency world. His supporters, largely libertarians, see crypto as a way to escape Argentina’s rampant inflation, which has severely devalued the peso. However, his reputation took a hit when he promoted a speculative cryptocurrency called $LIBRA. In a post, he claimed that the coin would help fund small businesses and boost the Argentine economy.
Following his endorsement, investors rushed to buy $LIBRA, causing its value to skyrocket. Unfortunately for them, Milei’s claims were misleading. The creators of the coin, who held a large amount of it, sold off their holdings just 45 minutes after Milei’s post, making off with $100 million and leaving investors with massive losses.
Realizing the fallout, Milei quickly deleted the tweet, but the damage was done. The incident has sparked outrage, especially among those who lost money. Critics, including members of the Peronist opposition, are using the scandal to undermine Milei’s political party, La Libertad Avanza (LLA), ahead of upcoming legislative elections. The situation escalated in the Chamber of Deputies when opposition members attempted to launch an investigation into the scandal, leading to conflicts among LLA legislators.
Milei’s defense of the situation has not helped his case. He likened investing in cryptocurrency to gambling, suggesting that investors should have been aware of the risks. This response has not satisfied critics or some of his own supporters, many of whom are now questioning his leadership.
The scandal has significant implications for Milei’s presidency. Argentine law could penalize politicians who use their positions for personal gain, with potential prison sentences and disqualification from future office. While there is no evidence that Milei personally profited from the $LIBRA debacle, the incident highlights a lack of caution in his approach to cryptocurrency, an area often associated with dubious projects.
Despite the turmoil, the scandal has not completely derailed Milei’s presidency. While it complicates his political agenda and could affect his ability to campaign, it remains to be seen how deeply this will impact his effectiveness in office. For now, Milei is in a precarious position, trying to regain control and restore trust among his supporters and the broader public.