Argentina’s Chamber of Deputies has approved a formal investigation into the LIBRA memecoin scandal that led to the loss of over $280 million in value for nearly 75,000 traders. The move comes after the token’s rapid rise and subsequent crash, which has sparked widespread political and public outrage.
In a special session held on April 8, lawmakers passed three resolutions aimed at uncovering the details behind the LIBRA scandal. The first resolution establishes an investigative commission to probe the token’s creation and collapse, which was approved by 128 votes in favor. The second resolution calls for the questioning of top government officials, including chief of staff Guillermo Francos, economy minister Luis Caputo, justice minister Mariano Cúneo Libarona, and the head of the National Securities Commission, Roberto Silva. The third resolution demands detailed reports from the executive branch about the development of the LIBRA token and the government’s role in its promotion.
The inquiry follows a highly controversial incident on February 14, when President Javier Milei publicly promoted the LIBRA token on X (formerly Twitter) as a way to “boost the Argentine economy.” The token surged by over 3,000% before crashing by 90% hours later. President Milei later deleted his post and claimed to be unaware of the token’s details, while his administration downplayed the promotion as routine support for entrepreneurship.
Further investigations have uncovered possible insider manipulation of the token. It has been revealed that Kelsier Ventures, a key player in the token’s launch, may have accessed a significant portion of the tokens and manipulated liquidity, making over $110 million in profits. This led to a series of lawsuits against the creators of LIBRA, with a class-action lawsuit filed on March 18 in New York by Burwick Law. The lawsuit accuses Kelsier Ventures, KIP Protocol, and Meteora of fraudulent practices, including withholding 85% of the token supply to allow insiders to profit while retail investors were misled by promises of economic revival.
The LIBRA scandal has triggered political fallout for President Milei, particularly as opposition lawmakers argue that his handling of the situation undermines his anti-corruption stance. This could have significant implications for Milei’s political future, particularly ahead of Argentina’s midterm elections later this year.
The investigation is expected to shed more light on the involvement of government officials and private entities in the controversial launch of LIBRA, and whether there was any deliberate attempt to mislead investors for personal gain.
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