Argentine prosecutors to probe Milei over 'cryptogate'

Argentine prosecutors will investigate President Javier Milei for promoting a cryptocurrency that crashed, losing investors billions of dollars and prompting a flood of complaints, local media reported Monday.

The federal prosecutor's office will examine whether Milei engaged in fraud or criminal association or was in breach of his duties when he praised the $LIBRA cryptocurrency on social media on Friday evening, according to news reports.

The currency's value soared then crashed, and Milei deleted his blessing hours later, admitting he had made a mistake.

Argentine economists, crypto specialists and opposition political figures criticized self-declared "anarcho-capitalist" Milei, an economist by training, and said the digital asset could be a fraud or Ponzi scheme.

Industry observers said the operation was likely a "rug pull" -- a scam where developers unveil a crypto token, attract investors, then quickly cash out.

Rights NGO Observatory for the Right to the City, one of several complainants, alleges Milei formed part of a "criminal organization that organized a fraud with the $LIBRA cryptocurrency that simultaneously affected more than 40,000 people with losses of more than $4 billion."

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The Kobeissi Letter publication, which provides analysis on global capital markets, said on X Friday that within minutes of its launch, "multiple large holders began liquidating MILLIONS of USD worth of $LIBRA."

"This included gains of +$4 million or more as $LIBRA rose to $4.6 billion in market (capitalization)," it reported.

Milei later said he did not know "the details of the project and after learning about it, I decided not to continue promoting it."

He added he had "obviously no connection" with the "alleged private company."

Nevertheless, former president and opposition figure Cristina Kirchner called Milei a "crypto-scammer" and opposition parliamentarians announced they will institute impeachment proceedings against him.

Other parties are seeking the creation of a special parliamentary commission to question Milei.

Improper conduct?

The main stocks on the Buenos Aires Stock Exchange opened nearly four percent lower on Monday -- a public holiday in the United States with markets there closed.

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The presidency on Saturday announced that Argentina's Anti-Corruption Office will be tasked with determining whether any improper conduct occurred.

It would also create a task force to carry out an "urgent investigation into the launch of the cryptocurrency $LIBRA, and all companies or individuals involved."

The prosecutor's office will also look into Julian Peh -- the CEO of companies that participated in the creation of $LIBRA -- as well as Chamber of Deputies president Martin Menem, who had reposted Milei's original endorsement.

Source: AFP