Javier Milei Faces Impeachment Threat as $107M Libra Rug Pull Rocks Crypto Markets

Buenos Aires, Argentina – In a stunning turn of events, Argentine President Javier Milei is facing intense political and public scrutiny, including calls for impeachment, following his endorsement of a cryptocurrency project that has been labeled a catastrophic $107 million rug pull.

The scandal surrounding the Libra (LIBRA) token has not only wiped out billions in market value but has also sent shockwaves through the broader cryptocurrency ecosystem, impacting even high-profile tokens like $TRUMP.

The Rise and Fall of Libra

The controversy erupted on February 14, when President Milei took to social media platform X to promote the newly launched Libra token, describing it as a “private initiative” aimed at “stimulating the growth of the Argentine economy.”

The endorsement triggered a frenzy of speculative trading, propelling the token’s market capitalization to a peak of $4.56 billion within hours. However, the euphoria was short-lived.

Just three hours after its debut on decentralized exchanges, insider wallets began aggressively cashing out, draining over $107 million in liquidity and causing the token’s value to plummet by more than 94%.

By the following day, Libra’s market cap had collapsed to a mere $257 million, erasing over $4 billion in value in less than 12 hours.

On-chain intelligence firm Lookonchain identified at least eight wallets linked to the Libra team as responsible for siphoning off 57.6 million USD Coin (USDC) and 249,671 Solana (SOL), valued at $49.7 million.

This rapid liquidation was facilitated by the token’s deeply flawed structure, with blockchain analysis firm Bubblemaps revealing that 82% of Libra’s supply was unlocked and sellable from the outset—a major red flag for any cryptocurrency project.

Compounding the issue, the Libra team shared no preliminary information about its tokenomics, leaving investors in the dark about the risks they were taking.

Market Manipulation and Retail Losses

The scale of market manipulation in the Libra launch was staggering. On-chain data indicates that only approximately 27% of transactions were actual sales, meaning that large sell orders from insiders were being filled by a disproportionate number of smaller buy orders, likely from retail traders.

For every seller, there were roughly two buyers, fueling over $1.1 billion in trading volume. This dynamic suggests that retail investors, lured by Milei’s endorsement and the promise of economic revitalization, were disproportionately harmed as insiders cashed out at peak prices.

The fallout was immediate and widespread, with more than 50,000 wallets becoming holders of Libra within the first two hours of its launch. For many of these investors, the token’s collapse rendered their holdings nearly worthless, marking one of the fastest and most significant destructions of wealth in retail trading history.

Ripple Effects on the Crypto Market

The Libra debacle did not occur in isolation. The launch of the token drew so much liquidity out of the broader cryptocurrency market that even unrelated projects felt the impact.

Notably, the $TRUMP meme coin, officially endorsed by U.S. President Donald Trump, saw its market capitalization plummet by $500 million in the aftermath of Libra’s collapse. The broader meme coin market bled out over $6 billion, underscoring the fragility of speculative assets in the face of such large-scale market disruptions.

Political Fallout and Impeachment Threats

For President Milei, the consequences of his endorsement are proving to be far-reaching. Opposition lawmakers in Argentina have seized on the scandal, with some calling for his impeachment.

“This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president,” opposition lawmaker Leandro Santoro told Reuters. Argentina’s fintech chamber has acknowledged the possibility that the Libra case constitutes a “rug pull,” further fueling public outrage.

Milei has attempted to distance himself from the controversy, deleting his initial endorsement post just five hours after it was published and issuing a statement on X claiming he was unaware of the project’s details.

He further stated that he has “no connection whatsoever” with the private enterprise behind Libra. However, these efforts have done little to quell the growing backlash, with critics questioning his judgment and due diligence as a leader who has positioned himself as a champion of free markets and economic reform.

In response to the mounting pressure, Milei has requested an investigation by Argentina’s Anti-Corruption Office, calling for a probe into all government members, including himself, for potential misconduct. The presidential office also disclosed that Milei met with representatives of KIP Protocol, the tech consultancy behind Libra, on October 19, 2024, to discuss the project’s aims of financing private ventures in Argentina.

A second meeting on January 30, 2025, involved a crypto entrepreneur named Hayden Mark Davis, who was presented as an infrastructure partner for the project. The investigation’s findings will be handed over to the courts to determine whether any crimes were committed.

A Cautionary Tale for Crypto and Politics

The Libra scandal highlights the dangerous intersection of politics and cryptocurrency, particularly in the realm of meme coins and speculative assets. While Milei’s endorsement followed a trend of celebrity-backed tokens—such as $TRUMP and $MELANIA, launched by Donald Trump and Melania Trump, respectively—the lack of transparency and oversight in Libra’s launch sets it apart as a particularly egregious case.

Critics argue that political leaders endorsing such projects without thorough vetting not only risk their own credibility but also expose retail investors to significant financial harm.

For the cryptocurrency industry, the Libra rug pull serves as a stark reminder of the need for greater transparency, regulation, and investor education. The absence of tokenomics disclosures, combined with the concentration of supply in insider hands, underscores the vulnerabilities inherent in many speculative projects.

As the market continues to evolve, incidents like this may prompt renewed calls for regulatory frameworks to protect investors from similar schemes.

Looking Ahead

As the investigation into Libra unfolds, the political and financial ramifications for President Milei remain uncertain. His administration, already grappling with economic challenges and public discontent, now faces a critical test of credibility.

For the thousands of investors left holding worthless tokens, the Libra collapse is a bitter lesson in the risks of speculative trading and the perils of trusting unverified endorsements, even from the highest levels of government.

On-Chain Media will continue to monitor this developing story, providing updates on the investigation, market impacts, and the broader implications for the cryptocurrency industry.