Libra crypto's dramatic rise and fall sent shockwaves through the cryptocurrency market when its value plummeted by 94% in February 2025. Following its launch on February 14, the token had reached an impressive market cap of $4.56 billion, only to collapse after Argentine President Milei's controversial involvement.

The incident has sparked multiple fraud investigations and over 100 complaints against President Milei, highlighting the far-reaching consequences of his promotional activities and subsequent deletion of support. Consequently, the Argentine stock index dropped nearly 4%, while accusations of a pump-and-dump scheme emerged when it was revealed that many of the 44,000 investors might have been bots.

This article examines the meteoric rise and catastrophic fall of the Libra token, its connection to Argentina's presidential controversy, and the ongoing legal and political fallout that threatens to reshape the country's leadership.

Is Libra Crypto a Meme Coin ?

Libra wasn’t just another failed project—it was a meme coin by default. Not because it intended to be, but because its only credibility came from the misplaced and short-lived endorsement of Argentine President Javier Milei. Unlike typical meme coins that thrive on internet culture and irony, Libra attempted to position itself as a serious financial tool for funding small businesses in Argentina. The issue? It had no real infrastructure to support those claims.

Most questionable crypto projects at least make the effort to publish a whitepaper, even if it’s filled with empty promises. Libra didn’t even bother. There was no clear breakdown of how funds would be distributed, who would qualify, or what requirements applicants needed to meet. Instead, the project’s entire funding mechanism boiled down to a Google Form where users could "Apply for Funding". This wasn't just a lack of transparency—it was a total absence of a functioning business model.

Rather than a serious initiative, Libra was nothing more than a speculative token riding on hype, with Milei’s endorsement acting as the sole driver of legitimacy. Once that evaporated, so did any illusion that this was something more than a marketing stunt. Investors were left holding yet another empty bag, proving once again that in the crypto world, hype without substance leads to the same predictable outcome.

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The Rise and Fall of Libra Crypto

The Solana-based LIBRA token's journey began with extraordinary momentum on February 14, 2025. Initially trading near zero, the token's market capitalization surged to an unprecedented $4.56 billion within hours of its launch.

Initial market performance

The token's early success drew massive investor interest, with over 50,000 wallets acquiring LIBRA tokens in just two hours. Trading volume reached an impressive $1.20 billion in merely four hours. Initially, the project appeared promising, with claims of supporting Argentina's development through small project funding.

Notable market statistics during the peak:

• Price reached almost $5.00 per token
• Trading volume exceeded $2.5 million tokens in the first hour
• Market capitalization touched $4.50 billion

Price crash timeline

Subsequently, the token's value began its dramatic descent. Within just 11 hours of trading, LIBRA's market cap plummeted by 94% to $257 million. Furthermore, blockchain analysis revealed that insider wallets initiated significant sell-offs merely three hours after the token's debut.

The collapse intensified as reports emerged that 82% of LIBRA's supply was concentrated in a single cluster. Additionally, the team had utilized Meteora's one-sided liquidity pools, systematically removing USD and SOL while the token price tumbled.

The impact extended beyond LIBRA, notably affecting other cryptocurrencies. The sudden liquidity drain caused a $500 million decrease in Trump coin's market capitalization. By February 15, LIBRA's market value had stabilized at approximately $300 million, marking one of the fastest collapses in memecoin history.

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President Milei's Involvement

Argentine President Javier Milei's endorsement of the Libra crypto project sparked immediate controversy on February 15, 2025. Through his social media platform X, Milei promoted the token as a private initiative aimed at "encouraging economic growth by funding small businesses and startups".

The controversial tweet

The president's endorsement coincided with Libra's launch, causing the token's market capitalization to soar above $4.00 billion. Although Milei claimed to support entrepreneurial ventures, his post raised eyebrows as the token's website used his campaign slogan "Long Live Liberty!".

Meeting with KIP Protocol

Before the controversy, Milei had met with KIP Protocol representatives in October 2024. At this meeting, the company presented their blockchain project focused on helping distribute funds to local Argentine businesses. KIP Protocol's CEO, Julian Peh, later clarified that they served only as technical consultants and neither created the token nor acted as market makers.

Deletion and aftermath

As the token's value began to plummet, Milei deleted his promotional post within hours. The president's office released a statement distancing him from the project, emphasizing that he "was not involved in any stage of the cryptocurrency's development". The fallout prompted these significant developments:

• The Anti-Corruption Office launched an investigation into potential wrongdoing
• Opposition lawmakers threatened impeachment proceedings
• Legal complaints were filed, accusing Milei of fraud

Therefore, Milei defended his actions in an interview with Todo Noticias, stating he "acted in good faith" and had "nothing to hide". Moreover, he argued that those who invested "knew what they were getting into" as volatility traders.

"I Didn't Promote It, I Shared It" – Milei's Defense

Under fire for his deleted LIBRA post, President Milei now claims he "didn't promote it, merely shared it." Comparing investors’ losses to gambling, he dismissed fraud allegations, insisting he acted "in good faith."

However, the scandal isn’t fading. A judge is reviewing fraud complaints, opposition lawmakers push for impeachment, and investor confidence in Argentina is shaken. Despite his denial, Milei's involvement turned LIBRA from an obscure token into a $4 billion meme-fueled frenzy—before it all came crashing down.

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Impact on Crypto Markets

The ripple effects of the LIBRA scandal reverberated throughout the cryptocurrency market, specifically hitting the Solana ecosystem hard. The token's collapse triggered a significant downturn in SOL's value, which dropped by 15%.

Solana ecosystem effects

The aftermath spread across various Solana-based projects. DeFi coins built on SOL experienced losses between 10-20%, as meme and AI tokens suffered even steeper declines of 20-40%. Accordingly, DeFi Tuna, a prominent Solana-based protocol, took decisive action by returning funds received from the LIBRA token launch.

The crisis prompted significant changes in the DeFi landscape. Undeniably, the controversy sparked broader discussions about ethical standards in token launches, with industry leaders calling for stricter oversight. Chris Chung, founder of Solana-based swap platform Titan, emphasized that the DeFi community must address extractive behavior to prevent similar incidents.

Investor losses

The financial damage proved extensive:

• 62.8% of wallets lost between $1 and $1,000
• 8.7% suffered losses ranging from $1,000 to $10,000
• 2.9% experienced losses between $10,000 and $100,000

Specifically, blockchain analytics revealed that 74,000 traders collectively lost $286 million in the LIBRA crash. The most substantial individual loss amounted to $5.17 million, as one investor purchased 2.1 million LIBRA tokens only to sell them for $430,000.

The incident's impact extended beyond the crypto sphere, affecting Argentina's traditional markets. The S&P Merval, the country's main stock index, plunged over 5%, marking its steepest decline since July 2023.

Stock Market Impact

The recent LIBRA cryptocurrency scandal has had a significant impact on Argentina's financial markets, particularly the S&P Merval index. Following President Javier Milei's promotion of the LIBRA token, which subsequently collapsed and was labeled a fraud, the Merval experienced a sharp decline. On February 17, 2025, the index fell by 4.7%, marking its largest one-day drop since July 2023.

This downturn reflects investor concerns over the political instability arising from the scandal. The incident has led to legal investigations and calls for impeachment, casting doubt on the government's credibility and economic policies. As a result, both domestic and international investors are reassessing their positions, leading to increased market volatility.

While some analysts believe the long-term impact on Argentine assets may be limited if the likelihood of impeachment remains low, the immediate reaction underscores the sensitivity of financial markets to political events. The situation serves as a reminder of the intricate link between political actions and market performance, emphasizing the need for transparency and stability to maintain investor confidence.

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Legal and Political Fallout

First of all, Judge María Servini of Federal Court No. 1 in Buenos Aires took charge of investigating the fraud allegations against President Milei. The probe centers on his promotion of the Libra cryptocurrency and its subsequent collapse.

Fraud investigations

The Anti-Corruption Office launched an immediate investigation, creating a special Investigation Task Unit (UTI) comprising financial, crypto, and anti-money laundering specialists. In fact, lawyers filed criminal complaints accusing Milei of being a "fundamental participant in the development, execution and planning of the mega-scam".

Opposition response

The political backlash intensified as opposition lawmakers demanded accountability. Their primary concerns included:

• Calls for impeachment proceedings
• Demands for a detailed explanation of government officials' involvement
• Requests for investigation into KIP Protocol's role

Former president Cristina Fernández de Kirchner openly labeled Milei a "crypto scammer," pointing out that his presidential position was used to inflate the token's value. Simultaneously, prominent socialist leader Myriam Bregman demanded Milei answer to Congress about the beneficiaries of the scheme.

Public protests

As a result of the controversy, demonstrations erupted outside the Casa Rosada presidential office. Juan Manuel Scala led protesters, holding signs criticizing the president's credibility. The public outcry prompted political analyst Marcelo García to warn that without a clear explanation, the incident could escalate into a broader credibility crisis affecting investor confidence.

The scandal's reach extended beyond Argentina's borders, with Mexico's president Claudia Sheinbaum expressing serious concerns about a president's authority to promote private ventures. The controversy has indeed become an unprecedented challenge to Milei's administration, threatening to undermine his economic reform agenda.

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Final Thoughts

The Libra cryptocurrency scandal is a testament to the astonishing lack of due diligence displayed by both President Milei and his advisors. That a sitting head of state could publicly endorse a project without even verifying whether it had a functioning roadmap, a clear funding structure, or basic legitimacy is nothing short of reckless. His attempt to distance himself after the collapse only underscores the lack of accountability in political endorsements of financial products.

Beyond Milei, this incident also highlights the shameless irresponsibility of celebrities and public figures who sell their image to provide credibility to crypto projects without taking any responsibility when things go wrong. Time and again, influencers and politicians have fueled speculative manias, only to walk away unscathed while retail investors suffer catastrophic losses. The idea that they can lend their reputation to financial ventures while expecting complete insulation from any fallout is absurd.

Rather than focusing solely on overregulation that prevents people from launching memecoins or celebrities from endorsing them, perhaps what truly needs to change is investor behavior. The pattern of blindly throwing life savings into speculative tokens every time a politician, actor, or athlete sneezes is the root of the problem. Until investors stop treating crypto like a lottery ticket and start demanding real transparency, the cycle of pump-and-dump schemes will continue. The Libra disaster is not just a lesson in political recklessness—it is a wake-up call for everyone who blindly chases hype without due diligence.

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