Argentina’s President Javier Milei faced controversy after his X account promoted a Solana-based memecoin, LIBRA. The coin, initially pitched as an exclusive venture aimed at stimulating the economy of Argentina, soon turned out to be an economic and reputational crisis.
Milei announced Free Argentina last Friday, describing it as an individual project that seeks to spur the Argentine economy, finance local micro-enterprises, and attract international investment. His announcement included the $LIBRA cash tag and Solana contract address.
The token’s price rocketed through the roof as it gained buyers, reaching a $4.5 billion market capitalization. But legality concerns saw it plummet over 90%, dropping from $4.50 down to $0.50 in 5 hours, and $4.4 billion in market cap vanished. It is now trading at $0.23.
Source: DexScreener
Amid the commotion, Milei pulled out his statement of support and distanced himself from the project, stating that he had had no idea regarding the project details previously and chose to withdraw from endorsing it upon hearing further. He also criticized political opponents, accusing them of using the situation to damage his reputation.
Source: X
LIBRA Token Faces Allegations of Insider Trading
As LIBRA’s price collapsed, there were rumors of insider trading. Blockchain analysis has identified significant transactions by project-connected wallets. A total of eight project-related wallets dumped $107 million through manipulation of liquidity, raising questions regarding the project’s intent. Additionally, analysts also found at least $20.18 million worth of profits earned by insiders, who had bought and sold LIBRA strategically during the quick surge it experienced.
The $LIBRA team has cashed out $107M!
8 wallets related to the $LIBRA team have obtained 57.6M $USDC and 249,671 $SOL ($49.7M) by adding liquidity, removing liquidity and claiming fees.
Wallets:
DefcyKc4yAjRsCLZjdxWuSUzVohXtLna9g22y3pBCm2z…pic.twitter.com/vpd7nGyMHQ
— Lookonchain (@lookonchain) February 15, 2025
Evidence suggests that massive amounts of USDC and SOL had just been sent from exchanges like Binance and KuCoin hours before Milei’s announcement. These had invested in buying LIBRA when it first emerged, later only selling out at the token’s peak, yielding massive profits. A wallet had earned $8.7 million in an hour.
KIP Protocol Claims Responsibility
KIP Protocol, the entity that created the LIBRA token, released an announcement clarifying President Milei’s role with the project. The protocol labeled it as an entirely personal project and guaranteed that Milei had nothing to do with it. According to the KIP Protocol, the token falls under the protocol’s “Viva la Libertad” project, which is aimed at funding personal projects in Argentina.
Today was the launch of the ambitious Viva la Libertad project to help private enterprises in Argentina, and the $LIBRA currency has been a success. We want to thank everyone for their trust and support.
To address all questions: we would like to clarify that this is a private…
— KIP Protocol (@KIPprotocol) February 15, 2025
Despite their promises, there have been criticisms that the project’s quickened launch, lack of operational protocols like multi-signature wallets, and connection to no-KYC exchanges show it may very well be an outright scam. Researcher Conor labeled the project suspicious, highlighting the lack of sufficient operational protocols.
Community Reacts as Trust Wanes
A broader discussion regarding memecoins and their impact on the crypto market has been started in the aftermath of LIBRA’s crash. Notable people like Andre Cronje called the incident as being in full crime mode. According to Cronje, Memecoins such as LIBRA draw users who are not particularly interested in blockchain technology or decentralized finance.
Nope, just a result of wider adoption. This meme stuff doesn’t really intersect or subtract from my work. It’s a demographic that doesn’t care about decentralized finance or even blockchains. So memes aren’t stealing any attention, since the participants weren’t our participants in…
— Andre Cronje (@AndreCronjeTech) February 15, 2025
However, because LIBRA was announced on several platforms, some people think it was an official launch, but others don’t think so. Many investors have become disappointed due to the project’s dubious practices and chaotic rollout. Nevertheless, the incident has damaged President Milei’s reputation and brought attention to the dangers of unrestrained memecoin promotions, whether on purpose or not.
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