2025 is looking to be the year of the politically motivated meme-coin scheme (say that 10 times fast). Only last month I was writing about the launch of $TRUMP, $MELANIA, and, most importantly, $LORENZO in the leadup to the 47th President’s inauguration. While $TRUMP has certainly lost some value since its all-time high – from being valued at over $73 per coin on January 23, 2025, to now being worth only ~$15 per coin – it appears that it has held on to enough value for it not to be considered an outright scam.
Unfortunately, the same cannot be said for the President who is the subject of today’s article. Earlier this month, Argentinian President Javier Milei promoted a meme coin known as $LIBRA on his social media accounts, causing its value to skyrocket to a high of USD $5.54 each, before crashing back down by 70% over the course of an hour, causing approximately 50,000 investors to lose just over USD $87m. This has led to accusations that Milei was complicit in a “rug pull” scam.
What is a Rug Pull?
A rug pull scheme, also known as an exit scam, is a scheme where a project or business appears legitimate, raises funds from participants, and then suddenly shuts down – taking investors’ money and leaving them with no recourse. The decentralized, and often unregulated, nature of cryptocurrency ecosystems allows scammers to operate anonymously and move funds quickly. Commonly, scammers launch a new token or platform, attract buyers, and then withdraw the liquidity (or “pull the rug”) once enough funds have flowed in.
Milei Taking LIBRA-ties
This scandal centers on Argentine President Javier Milei’s public endorsement – and subsequent withdrawal of support – for a meme-based cryptocurrency called $LIBRA. Milei promoted the coin on his social media accounts only minutes after the official launch, causing the coin’s value to skyrocket from a fraction of a cent to over $5 in a matter of hours. Investors from Argentina and the United States quickly poured in roughly $100 million, only to see early purchasers of the coin start to sell off their coins, causing the currency to plummet. Soon after, Milei deleted his promotional posts and attempted to distance himself from the project.
According to a social media post from crypto analytics firm LookOnChain, eight digital wallets linked to early trading of the coin cashed out a total of $107 million. Meanwhile, ICOBench showed some 60 individual traders each lost more than $500,000, while 24 traders lost at least $1 million each. The abrupt collapse erased an estimated $4.4 billion in market value.
The Fallout
Within Argentina, public demonstrations have erupted, with protesters in Buenos Aires calling for “Less Libra, more books” – a reference to Milei’s budget cuts in education. Meanwhile, prominent newspapers like Clarin and La Nacion have condemned Milei’s management of the crisis, questioning his judgment and willingness to heed advice. While current opinion polls show around 42% support for Milei’s party, these were conducted prior to the crypto debacle.
This incident has triggered a lawsuit accusing Milei of fraud and sparked a political firestorm. Critics argue that Milei’s actions encouraged countless small-scale investors to throw money into the scheme. While legal experts say it may be difficult to prove Milei’s direct liability, the political consequences are already apparent. The president’s credibility, bolstered by his longstanding reputation as an economic expert capable of reversing Argentina’s debt-ridden fortunes, is now under intense scrutiny.
However, there is evidence that Milei’s economic expertise should have been scrutinized long before this point. In 2021, Milei, then serving as a national deputy, endorsed the cryptocurrency platform CoinX, which promised high monthly returns of up to 8% through automated trading algorithms. The following year, Argentinian authorities labelled CoinX’s operation unauthorized and likened it to a Ponzi scheme, leading to investigations and raids on multiple locations. Thousands of investors lost millions, but Milei distanced himself by stating he had merely offered his opinion. Later in 2022, Milei promoted another venture, the Vulcano Game NFT project, calling it “very interesting.” Soon after his endorsement, the game’s token ($VULC) lost all its value.
Economic analysts such as Hernan Letcher from the Argentinian Center for Economic Policy (CEPA) highlight the potential fallout on Argentina’s global standing. With the country relying on fresh funds from the International Monetary Fund (IMF) to sustain economic reforms, the scandal arrives at an unfortunate time, as the IMF has consistently pushed for stricter cryptocurrency regulations. The episode also raises concerns about the commitment of Argentina’s leadership to transparent, responsible financial management.
The $LIBRA scandal is a reminder that the meteoric rise of meme-coins can mask significant risks—even when backed by high-profile figures. As Argentina grapples with the economic fallout, and as questions swirl about President Milei’s judgment and accountability, the episode highlights a broader pattern: political and celebrity endorsements of volatile cryptocurrencies often leave everyday investors to bear the brunt.
