Argentina Freezes $507K in Assets Linked to Libra Meme Coin Investigation Involving President Milei

Argentina's federal court has frozen more than $507,000 as part of an investigation into the Libra meme coin scandal, associated with President Javier Milei. This action highlights what authorities consider one of the largest crypto fraud cases in the country, allegedly connected to a pump-and-dump scheme.

Key Takeaways

Argentina's federal court has frozen $507,000 in connection with the Libra meme coin investigation linked to President Milei.
Federal Judge Marcelo Martínez de Giorgi ordered the asset freeze, which includes U.S. businessman Hayden Davis and two other crypto operators.
Investigators suspect a massive fraud estimated at between $100 million and $120 million involving Libra.
Allegations include the use of intermediaries to convert cryptocurrency for Milei's associates.
Despite the scandal, Milei's party, La Libertad Avanza, achieved surprising success in midterm elections.

Argentina Freezes $507K in Libra Meme Coin Probe Tied to President Milei: Report

The Libra Meme Coin Scandal Explained

Argentina's federal court has frozen assets exceeding $507,000 amid a widening investigation into the Libra (LIBRA) meme coin scandal, which has connections to President Javier Milei. This action signals a significant development in what authorities are calling one of the largest cryptocurrency fraud cases in Argentina, centered around a purported multimillion-dollar pump-and-dump scheme.

Details of the Asset Freeze

The asset freeze was ordered by Federal Judge Marcelo Martínez de Giorgi and targets U.S. businessman Hayden Davis, the founder of the Libra project, as well as two crypto facilitators: Colombia's Favio Camilo Rodríguez Blanco and Orlando Rodolfo Mellino from Argentina. The freezing of these assets followed a request from federal prosecutor Eduardo Taiano, aiming to secure funds believed to be related to a substantial fraud against investors, estimated between $100 million and $120 million.

How Did the Libra Coin Collapse Occur?

Documents examined by Argentina’s Secretariat for Financial Investigation indicate that the defendants operated what could be described as a “financial den” within the cryptocurrency sector. The court has imposed an indefinite ban on any activity regarding the frozen assets, meaning no movement or sale will occur until the investigation concludes. Additionally, the order mandates Argentina’s National Securities Commission (CNV) to inform virtual asset service providers and extend the asset freeze across all cryptocurrency platforms in the country.

Investigators have claimed that Rodríguez Blanco and Mellino played intermediate roles, converting cryptocurrencies into fiat for Davis and associated lobbyists Maurício Novelli and Manuel Terrones Godoy, who are also under scrutiny. Authorities tracked various transactions, including one from February 17, when Novelli’s family withdrew cash from Banco Galicia just hours after the LIBRA token's fall.

One notable transaction involved Davis sending $507,500 through the Bitget exchange a mere 42 minutes after President Milei shared a selfie with him, heralding Davis as an advisor on blockchain and AI. Prosecutors suspect these funds could act as indirect payments to public officials, with intermediaries used to conceal the money's origin.

Political Consequences Amid the Libra Scandal

Milei and His Party's Resilience

Documents reveal that months before LIBRA’s launch, Novelli and President Milei had discussions about initiatives to "monetize the president’s image," reportedly held at the presidential residence. While Milei's lawyer at that time expressed concerns about possible conflicts of interest, leaked messages from Davis suggested he had substantial influence over the Milei family, claiming to financially support Milei's sister while directing presidential decisions.

Launched in mid-February, the LIBRA token initially surged to a market capitalization of $4.5 billion after Milei’s endorsement but plummeted by over 94% within hours, resulting in significant investor losses characteristic of pump-and-dump schemes. Data from Bubblemaps and Lookonchain identified at least eight insider wallets linked to total cash-outs of $107 million, with some funds reportedly reinvested into other meme coins.

Further findings from Bubblemaps indicated the same wallet linked to LIBRA was also associated with the MELANIA token, which experienced a similarly rapid rise and fall earlier in the year. Investigators suspect a calculated insider scheme, given the pattern of cross-chain transactions involving Arbitrum, Avalanche, and Solana networks.

Despite the political fallout from the LIBRA scandal, including a drop in Milei's public trust—his approval rating falling from 47.3% in November to 41.6% in March—his pro-crypto party, La Libertad Avanza, recently achieved an unexpected victory in the midterm elections. The party garnered 40.68% of the national vote and secured key regions, such as Buenos Aires province.