Argentine Prosecutor Moves to Freeze $110M in LIBRA Memecoin Fraud Case.

A major cryptocurrency scandal is unfolding in Argentina as federal prosecutor Eduardo Taiano pushes to freeze assets worth up to $110 million linked to the LIBRA memecoin fraud case. The controversy, now widely referred to as “Libragate,” involves Argentine President Javier Milei, who allegedly endorsed the Solana-based cryptocurrency before its price collapsed.

The case has sent shockwaves through Argentina’s political and financial sectors, raising concerns about crypto regulations, insider trading, and the role of influential figures in the market.

Investigation Into LIBRA Scandal

The LIBRA memecoin was initially marketed as a revolutionary project designed to support small businesses and startups in Argentina. Promoters claimed that LIBRA would help struggling entrepreneurs by providing an alternative financial ecosystem based on blockchain technology. However, the optimism was short-lived.

On February 14, LIBRA’s market capitalization soared to an astonishing $4.5 billion. But within hours, the token’s value plummeted by over 90%, wiping out millions in investor funds. The sudden collapse led to accusations of an insider “rug pull,” where key players allegedly withdrew large sums of money before the crash, leaving unsuspecting investors with worthless tokens.

According to Argentine media outlet Clarín, prosecutor Taiano has requested access to detailed records of all LIBRA transactions since its inception. His investigative team is now analyzing financial movements around February 14-15, the peak trading period, to trace suspicious transactions and identify those who profited from the token’s downfall.

Freezing Digital Wallets and Recovering Deleted Posts

To prevent further dispersal of funds, Taiano has taken immediate action by requesting the freezing of multiple digital wallets associated with the fraud. Reports indicate that at least eight wallets linked to LIBRA insiders successfully cashed out approximately $107 million before the crash. Prosecutors believe these funds may have been moved to offshore accounts or exchanged for other cryptocurrencies to evade tracking.

Authorities have also filed international requests to gain access to information from foreign cryptocurrency exchanges, aiming to trace the movement of funds across borders. This step is crucial, as crypto transactions can be easily moved between wallets and converted into various digital assets, making it difficult to recover stolen money.

Another key focus of the investigation is recovering deleted social media posts. President Milei had initially promoted LIBRA on his official social media accounts, but those endorsements were later removed. Investigators are working to retrieve these posts, as they could provide evidence of Milei’s potential involvement or knowledge of the scheme.

Money Laundering Concerns

Adding another layer of complexity to the case, investigators recently identified a $4.5 million transfer from a wallet tied to the LIBRA scandal. The funds were moved to a new address, and a portion was allegedly used to purchase another memecoin called POPE. This activity has raised suspicions of money laundering, as those involved may be attempting to obscure the origins of the stolen funds by cycling them through other digital assets.

In response, Taiano has expanded his investigation to include potential financial crimes beyond fraud. He has requested access to phone records, visitor logs, and other communications from Argentina’s presidential residence and office. Additionally, he is compiling a list of blockchain experts and individuals close to Milei who may have knowledge of the LIBRA operations.

Political Fallout

The LIBRA controversy has sparked intense political backlash in Argentina. President Milei, a vocal supporter of cryptocurrency and free markets, now faces calls for impeachment from opposition leaders. Critics argue that his public endorsement of LIBRA misled investors and contributed to the hype that drove the token’s short-lived success.

Milei, however, has denied any wrongdoing. He claims he merely “spread the word” about LIBRA and was not directly involved in its creation or financial dealings. Despite this, his political opponents argue that a sitting president should not have promoted a speculative digital asset without conducting due diligence.

The scandal comes at a critical time for Milei, who is working to strengthen political alliances ahead of Argentina’s congressional midterm elections. His administration was already facing challenges due to economic instability, and the LIBRA case has further complicated his efforts to gain public trust.

As the investigation continues, the "Libragate" case is expected to have lasting consequences for Argentina’s cryptocurrency regulations and its political landscape.