Milei and LIBRA: fraud, connections and potential legal liability

The LIBRA scandal is no longer a mere anecdote of political malpractice; it has become a time bomb for Javier Milei’s administration.

It is no longer just a matter of irresponsibly promoting a financial asset: new revelations point to a network of connections between the president and the architects of LIBRA, which deepens suspicion about his role in the affair.

The La Nación article (15 February 2025)

reveals previous meetings between Milei and the creators of LIBRA, while the statement from the Argentine Fintech Chamber attempts to distance the sector from this scandal, suggesting that even within the crypto world there is concern about the legal consequences.

If there were once doubts as to whether LIBRA was a mistake or a fraud, there are now concrete signs that it was a premeditated operation. Moreover, Milei’s track record with failed crypto promotions (CoinX, Vulcano Game) reinforces a systematic pattern of promoting unchecked assets that end up collapsing, with investors losing millions.

Connections that reinforce suspicions

Mauricio Novelli, a trader close to Milei, met with him at the Casa Rosada months before the launch of LIBRA.

Julian Peh, CEO of Kip Protocol, the company that created LIBRA, also held meetings with Milei outside the government headquarters.

Hayden Mark Davis, founder of Kelsier Ventures and the person responsible for launching LIBRA, claimed to be an adviser to Milei and stated that the president had initially supported the project.

Was LIBRA designed to manipulate the market?

The project’s website was created on the very day of the launch, with no solid track record behind it.

Bots artificially inflated the price after Milei’s tweet.

Eight wallets withdrew $107 million minutes before the crash in a manually orchestrated ‘rug pull’.

In short, LIBRA was not a genuine cryptocurrency but an alleged scheme designed to manipulate the market. And, most seriously, the architects of this scam have a history of working with Milei.

The Argentine Fintech Chamber tries to distance itself from the scandal

That same day, 15 February 2025, the Argentine Fintech Chamber issued a statement (see image) seeking to distance the crypto industry from the LIBRA case.

Key points of the statement:

They claim that LIBRA is an isolated case and does not represent the Argentine crypto ecosystem.

They insist on the need for transparency and regulation in the sector.

They highlight that Argentina transacted more than $91.1 billion in crypto in 2024, reinforcing the idea that crypto technology is legitimate, but needs legal certainty.

What stands out: its swift attempt to distance itself suggests that LIBRA is seen within the sector as an obvious fraud, which heightens suspicions of financial manipulation.

Anti-Corruption Office (OA) investigation: An internal investigation was launched to determine whether there was misconduct or conflicts of interest within the government.

Creation of the Investigation Task Unit (UTI): a specialist team to gather information on the launch of LIBRA and refer it to the courts.

Milei distances himself: he deleted his post and denied knowing the details of the project, attributing it to a ‘communication error’.

CNV warning: the National Securities Commission called for tighter regulation of crypto-assets to prevent similar frauds.

These actions seem more like an attempt at damage control than an actual effort to shed light on the fraud. Without structural changes in crypto regulation, cases like LIBRA will continue to occur with impunity.

Although Milei’s promotion of LIBRA has had a strong political and economic impact, the legal measures in force in Argentina do not seem robust enough to penalise this kind of conduct.

Shortcomings in current legislation:

Ethics in Public Service Law (Law 25,188): does not provide for direct criminal penalties and only allows administrative disqualification.

Penal Code – Illicit Enrichment (Art. 268): Difficult to apply if the profits cannot be linked directly to Milei.

Fair Trade Law (Law 22,802): it has never been applied to a president.

Capital Markets Law (Law 26,831): LIBRA was not registered as a security, which complicates its application.

In short, without stricter regulation, these legal loopholes will continue to allow public figures to promote fraudulent projects with no real consequences.

Urgent reforms to prevent further scams

Reform of the Public Ethics Law: explicitly prohibit the promotion of unregulated investments.

Specific regulation for crypto-assets: mandatory registration with the CNV and transparency on beneficial owners.

Tougher sanctions for fraudulent advertising by public officials: amend the Fair Trade Law to include clear penalties.

Making crypto market manipulation a criminal offence: introduce penalties in the Penal Code for cases such as LIBRA.

A government involved, or simply complicit?

The LIBRA scandal is not just another crypto-fraud story; it reflects an administration that, using deregulation and ‘market freedom’ as an excuse, has opened the door to shady financial schemes without any kind of control.

If the government was truly unaware of LIBRA’s background, then it is guilty of alarming negligence. If, on the other hand, key figures within the ruling party participated in its promotion knowing what was happening, we are faced with an even more serious case: an attempt to manipulate the market from the highest levels of power.

LIBRA is not just a crypto scam; it is a symptom of an alleged model of power that uses the digital economy to manipulate the market and profit from deregulation without taking any responsibility.