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Argentina’s President Javier Milei has been exonerated by the country’s Anti-Corruption Office regarding his involvement in the controversial LIBRA memecoin scandal, which resulted in significant financial losses for investors.

The announcement, made by local media, indicates that the office found no legal violations in Milei’s promotion of the cryptocurrency earlier this year.

No Legal Breach Found

In a resolution released on Friday, the Anti-Corruption Office stated that Milei acted in his capacity as an economist rather than a public official when he endorsed the LIBRA cryptocurrency on social media platform X (previously Twitter) in February.

According to the resolution, Milei’s personal account was established long before his presidency and was not linked to any official state actions related to the cryptocurrency.

The office, led by Alejandro Melik, who was appointed by Milei’s administration in December 2023, emphasized that no state procedures or contracts involving the LIBRA memecoin were identified. Notably, the Anti-Corruption Office initiated its investigation at Milei’s own request.

While the ruling clears Milei of wrongdoing, the case remains under investigation by courts in Argentina, the US, and Spain. In April, Argentina’s lower house voted to form a commission to probe the scandal, but the ruling party has stymied efforts to advance the investigation.

LIBRA Scandal Investigated

The LIBRA scandal erupted on February 14, when President Milei publicly endorsed the cryptocurrency, claiming it would strengthen the Argentine economy by supporting small businesses.

His announcement included a “contract number” that allowed potential investors to locate the token, which was not listed on major exchanges. Initially, the value of LIBRA surged to over $5 but plummeted to nearly worthless within hours, leading to massive losses for thousands of investors.

Milei’s collaboration with Hayden Davis, the creator of the LIBRA memecoin, has drawn scrutiny. Reports indicate that Milei met with Davis multiple times prior to the token’s launch, facilitated by Argentine businessmen Mauricio Novelli and Manuel Terrones Godoy.

These meetings raised concerns, particularly after Sergio Morales, a former advisor to Argentina’s National Securities Commission (CNV), resigned amid a prosecutor’s investigation into his possible involvement in the scandal.

The resolution from the Anti-Corruption Office includes numerous references to US Supreme Court cases and discusses the complexities of distinguishing between personal and institutional responsibilities.

It concluded that while Milei occasionally referenced public policies on his personal account, he did so in a non-official capacity, as the account predates his governmental responsibilities.

The daily chart shows LIBRA’s price consolidation after its massive drop. Source: LIBRAUSDT on TradingView.com

As of now, the memecoin trades at $0.030, down over 96% from its all-time high reached on February 14. However, over the monthly time frame, the token has registered gains of 37%.

Featured image from BBC, chart from TradingView.com

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Argentina’s federal anti-corruption authority has cleared President Javier Milei of any wrongdoing for his February support of the cryptocurrency token Libra.

The office mentioned that his social media endorsement was made in a personal capacity without using federal resources.

The anti-corruption office, operating under a government ministry, concluded that Milei’s X post promoting the token did not violate federal ethics laws governing public officials. However, a separate federal criminal court investigation into the matter remains ongoing.

What was the origin of the LIBRA controversy?

As part of a project named “Viva La Libertad” (Long Live Freedom), Delaware-registered corporation Kelsier Ventures introduced the Libra (LIBRA) token on Feb. 14. Within minutes of its launch, President Milei posted about it on his X account.

Additionally, he defined it as an endeavor to boost Argentine economic expansion by assisting startups and small enterprises with private investment made possible by blockchain technology.

Milei described the token as a valid private economic endeavor and posted the token’s blockchain contract address as part of his support.

Within 40 minutes, the price of LIBRA surged from near-zero to approximately $5 per token. It also reached a peak market capitalization of roughly $4.5 billion.

The euphoria proved short-lived as the token’s founders, who controlled approximately 70% of the total supply, liquidated their holdings at peak prices.

This massive sell-off triggered an 85% price collapse within hours. It also caused losses between $100 million and $250 million

Milei has consistently denied any improper conduct and maintained that his social media activity was intended to raise awareness about cryptocurrency’s potential to support Argentine businesses rather than encourage direct investment. The president emphasized that his posts followed a meeting with Libra’s founders and represented personal views.

The anti-corruption office’s decision focuses specifically on whether Milei violated ethics rules for public officials. They concluded that personal social media usage does not constitute improper use of government resources.

The ongoing federal criminal investigation examines different aspects of the case and potentially includes securities law violations and market manipulation charges. Criminal courts operate independently from administrative ethics reviews, which means separate legal proceedings could reach different conclusions.

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