David Edwards
Argentine lawmakers are moving to impeach President Javier Milei following a cryptocurrency scandal that allegedly wiped out hundreds of millions of dollars in investor funds overnight, according to Reuters.
The controversy erupted after Milei endorsed the meme coin $LIBRE on X (formerly Twitter) late Friday night. The token’s price skyrocketed from $0.006 to nearly $5 per coin, attracting a flood of investors. However, within six hours, $LIBRE collapsed to $0.84, triggering allegations of a rug pull—a fraudulent scheme where project insiders artificially inflate a token’s value before cashing out, leaving investors at a loss.
Political Fallout and Impeachment Push
The abrupt crash prompted an immediate backlash, with opposition lawmakers seizing the moment to demand Milei’s removal.
“This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president,” said opposition coalition member Leandro Santoro on Saturday.
Milei deleted his $LIBRE endorsement post within hours, but the damage had already been done. Many investors had assumed the token had official government backing. The Argentine Fintech Chamber later confirmed that the incident had all the hallmarks of a rug pull.
Milei has since distanced himself from the project, claiming ignorance about its specifics:
“I was not aware of the details of the project, and once I found out, I decided to not continue giving it publicity,” he stated.
His opponents, however, remain unconvinced.
KIP Protocol’s Role and Changing Statements
KIP Protocol, the company behind $LIBRE, initially claimed Milei had no involvement. The blockchain firm, backed by Animoca Ventures in Hong Kong, described $LIBRE as a private initiative with no governmental ties.
“President Milei was not and is not involved in the development of this project,” KIP Protocol stated on X.
However, the company later revised its stance, acknowledging that the token’s launch and market-making were fully managed by Kelsier Ventures, a firm led by Hayden Davis. KIP Protocol denied holding any $LIBRE tokens, stating their role was purely post-launch, providing infrastructure for AI-driven projects.
The scandal intensified as KIP Protocol officials reported receiving threats following the token’s collapse.
Congressional Investigation Gains Momentum
With the impeachment effort gathering steam, lawmakers are demanding clarity on who profited from $LIBRE’s meteoric rise and subsequent crash. Opposition leaders argue that Milei’s endorsement, even if indirect, misled the public.
Former President Cristina Fernández de Kirchner, a vocal Milei critic, condemned the fiasco:
“Thousands who trusted him lost millions, while many made fortunes due to privileged information,” she stated.
Milei Orders Official Investigation into $LIBRE
In an attempt to quell the backlash, the Argentine presidency announced an official investigation into $LIBRE. A government statement revealed that Milei had met with KIP Protocol officials Mauricio Novelli and Julian Peh on October 19, 2024, where they presented their blockchain-based initiative, “Viva la Libertad.”
Additionally, on January 30, 2025, Milei met with Hayden Mark Davis at Casa Rosada, Argentina’s presidential palace. The government clarified that Davis had no formal connection to the administration and had been introduced by KIP Protocol.
Defending his endorsement, Milei stated:
“The President shared a post on his personal accounts announcing the launch of the KIP Protocol project, just as he does daily with many entrepreneurs who want to launch a project in Argentina to create jobs and attract investment.”
To address the scandal, the Anti-Corruption Office (OA) will investigate whether any government officials engaged in misconduct. Additionally, Milei has formed an Investigation Task Unit (UTI) composed of experts in cryptocurrency, finance, and money laundering to scrutinize the matter.
“All information gathered will be handed over to the courts to determine whether any individuals or companies linked to the KIP Protocol project engaged in criminal activity,” the statement read.
As the political storm intensifies, Milei faces a critical battle to maintain his presidency amid growing scrutiny over his crypto ties and economic policies.
