Argentina’s Chamber of Deputies has approved an official inquiry into the LIBRA memecoin scandal following months of growing political pressure. A special investigative commission received legislative approval to launch its operations, while high-level officials received subpoenas for testimony. Political pressure has caused the public to focus more intensely on President Javier Milei’s government and its role in the LIBRA project.
The decision follows mounting allegations of fraud, investor deception, and government negligence tied to the rapid collapse of the LIBRA token. The investigation team must examine the responsibilities of different officials alongside the roles of businessmen associated with digital currency. The government created this initiative to address the uncontrolled digital assets that continue to endanger the vulnerable Argentine economy.
The analysis will evaluate the economic losses caused by the rug pull, which affected numerous retail investors. The commission operates to discover misbehavior, enforce responsibility standards, and safeguard the public’s welfare. Investigating cryptocurrency projects will help determine future regulatory norms in Argentine crypto industries.
The LIBRA Scandal
LIBRA, a meme coin promoted to support small businesses, became controversial after a sharp market crash in February. Shortly after receiving President Milei’s social media backing the token experienced a rapid price spike yet lost more than 90% of its value throughout the following hours. Following early appreciation of the coin, President Milei chose to separate from it while claiming not to know its creation method.
Market analysts labeled LIBRA’s crash a textbook example of a rug pull, where token creators rapidly inflate and dump their assets. During the incident, retailers lost approximately $280 million among their estimated 75,000 investments. FOIA revealed that the Privacy Act prevented authorities from granting access to records regarding the scandalous situation, which led to significant public backlash.
Widespread doubts emerged regarding whether the President held initial discussions with foreign business leaders and local entrepreneurs participating in crypto coin creation. LIBRA’s creator, Hayden Davis, accused Milei of betrayal after he deleted promotional posts. The advisor took responsibility for contributing to government development work on the project.
Congress Launches $LIBRA Probe as Pressure Mounts
On Tuesday, the Chamber of Deputies voted 128–93, with seven abstentions, to form a special commission to investigate the LIBRA case. The commission must evaluate the presidential role and confirm whether any public servants conceded or ignored fraudulent practices. The commission also aims to explore the existing relationship between President Milei and the foreign persons being investigated.
The special investigation requires Economy Minister Luis Caputo, Justice Minister Mariano Cuneo Libarona, and other senior government officials to provide testimony in front of Congress. Legislators maintain transparency, which serves two essential purposes: revitalizing investor faith and stopping such incidents from happening again. An examination will determine if government bodies had a duty to maintain oversight and provide alerting notices about this hazardous investment product.
Opposition parties expressed concern that public funds or influence were misused to promote LIBRA. Legislator Pablo Juliano emphasized the need to determine if Argentina suffered material harm due to the coin’s failure. Members of the La Libertad Avanza party under Marcelo Mario Luigi Milei condemned the investigation because it exceeded institutional authority.
President’s Ties Questioned
President Milei’s involvement in the LIBRA controversy has drawn scrutiny due to his early support and links to key backers. Meetings with US, Singapore, and Argentina stakeholders are now under legal review as part of broader investigations. International and local courts review fraud and collusion suspicions together.
A federal judge examines whether President Milei violated his duties by unverifying his support for the coin launch. The investigators analyze whether the administration gained secondary benefits by witnessing the cryptocurrency token rise in its initial period. The court proceedings highlight a new urge to stop political entities from unrestricted control in cryptocurrency markets.
Digital asset oversight must be strengthened because this crisis shows that crisis-torn nations need better frameworks to protect their investors. Multiple sources stress that political backers misguide ordinary investors into hazardous speculative investments through endorsements. Argentina’s ongoing inflation crisis has made citizens more vulnerable to high-risk investment schemes.
According to CoinMarketCap, LIBRA is currently priced at $0.05 and has a market cap of $13,991,687. Market performance indicates a loss of 94.31% value throughout the previous 60—and 90-day periods.
LIBRA dropped another 10.69% in the past week alone, while daily trading volume declined by 55.97% to $9,443,442. The circulating supply of LIBRA stands at 256,429,139 tokens, and its fully diluted market cap is $54,563,562.
FAQs
What is the LIBRA memecoin?
LIBRA is a cryptocurrency token promoted as a private initiative to boost Argentina’s economy by supporting small businesses.
Why is it considered a scandal?
The token crashed over 90% within two hours of a high-profile endorsement, leading to accusations of a rug pull scam.
How many investors were affected?
Over 75,000 investors reportedly lost over $280 million due to the sharp decline in LIBRA’s value.
Is President Milei officially linked to the scandal?
President Milei supported the coin early on but denied involvement later. A judicial probe is now investigating his ties.
What actions has Congress taken?
Congress approved an official inquiry and summoned top government officials to testify before an investigative commission.
Glossary
Rug Pull – A fraudulent practice in which crypto developers promote a token and then sell off holdings, collapsing its value.
Memecoin is a cryptocurrency often created as a joke or meme but sometimes used for speculative investment.
Chamber of Deputies – Argentina’s lower house of Congress, responsible for passing legislation and initiating investigations.
Circulating Supply – The number of cryptocurrency tokens currently available in the market and being traded.
Market Cap – The total value of a cryptocurrency calculated by multiplying the current price by the circulating supply.
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