Argentina’s President Javier Milei recently made headlines when he withdrew his support for the LIBRA meme token, citing a lack of due diligence. This decision came after the token’s price plummeted nearly 89% within hours, leading to allegations of a pump-and-dump scheme. On-chain analysts also raised concerns about suspicious fund movements and centralized control of the token supply.
Initially, Milei had endorsed LIBRA in a now-deleted post on X, linking it to the Viva La Libertad Project and claiming it would benefit Argentina’s economy by supporting small businesses. However, upon further examination, Milei admitted that he had not thoroughly investigated the project before backing it. In a statement, he clarified, “I initially supported a supposed private enterprise with which I have no connection. After becoming aware of the details, I decided to discontinue spreading the word.”
After Milei’s endorsement, traders flocked to buy LIBRA, driving its market capitalization to $4.5 billion. But as doubts about the project’s legitimacy surfaced, the token’s price collapsed from $4.50 to $0.50. Trading volume spiked to $1.1 billion before a sell-off exacerbated the decline.
Investigations into LIBRA’s blockchain data revealed that a significant portion of the token’s total supply was concentrated in a few wallets, raising concerns about centralized control. Analytics firm Bubblemaps reported that developers had withdrawn $87 million from liquidity pools, hastening the token’s downfall. Additionally, Chainalysis pointed out that the addresses controlling LIBRA’s creation and supply seemed to be linked to a single private key, rather than a more secure multi-signature setup.
This incident is not the first time Milei has faced backlash for endorsing crypto projects. In 2021, he supported CoinX, which turned out to be a Ponzi scheme. Investors sued Milei for losses amounting to millions of Pesos after regulators shut down CoinX.
The LIBRA debacle bears similarities to the launch of $TRUMP, a meme coin associated with former U.S. President Donald Trump. While $TRUMP proved to be legitimate, LIBRA’s authenticity came under scrutiny. Both tokens experienced a surge in trading activity followed by uncertainty about their credibility.
It is essential for investors to conduct thorough research and exercise caution when engaging with cryptocurrency projects. The information provided in this article is for educational purposes only and should not be construed as financial advice. Readers are encouraged to proceed with vigilance before making any investment decisions related to the discussed projects.