Argentina’s Milei Faces Crypto Controversy Ahead of US Visit
Argentine President Javier Milei is facing political backlash and an internal government probe after his endorsement of a cryptocurrency project, Libra ($LIBRA), led to steep financial losses for investors. The controversy comes at a critical moment, as Milei prepares for a key diplomatic trip to Washington, where he hopes to meet Donald Trump and secure new International Monetary Fund (IMF) funding for Argentina.
On Friday night, Milei posted on social media promoting Libra, a cryptocurrency he described as a private initiative to support small businesses in Argentina. His endorsement triggered a surge in the token’s value, which skyrocketed past $4 billion. However, within hours, Libra collapsed, wiping out millions of dollars in investments.
Among those affected was Barstool Sports founder Dave Portnoy, who publicly criticized the project, calling it “the biggest rug pull of all time”—a term used in crypto to describe sudden price crashes often linked to fraud.
Hayden Davis, the entrepreneur behind Libra, initially claimed he was working closely with Milei’s government on broader digital currency initiatives. However, Milei’s office quickly denied any formal ties to Davis or the project.
By Saturday morning, Milei deleted his endorsement post and distanced himself from the token, stating he was unaware of the details and regretted spreading it. Meanwhile, Davis announced he would return some of his profits to Libra investors in an attempt to restore confidence.
The Argentine government launched an internal anti-corruption investigation to determine whether any officials were improperly involved in promoting Libra. The opposition has seized on the controversy, with some lawmakers calling for Milei’s impeachment, though such an effort is unlikely to succeed without a two-thirds majority in Congress.
Despite the scandal, Milei’s approval ratings remain strong, hovering around 47%, largely due to declining inflation, wage growth, and signs of economic recovery. However, analysts warn that the episode reinforces concerns about his impulsive leadership style.
Milei’s upcoming trip to Washington is crucial for Argentina’s financial stability. He is seeking IMF support and hoping to negotiate exemptions from Trump’s proposed tariffs on Argentine goods. The timing of the Libra controversy could complicate these negotiations, as it raises questions about Milei’s credibility on the international stage.
While Milei remains a popular figure among libertarian and right-leaning leaders, this crypto controversy is a significant political misstep that could impact his broader reform agenda. As the government investigates, the full consequences of the Libra debacle remain uncertain.
