Javier Milei And The Libra Crypto Scandal: Explained

Even though Milei later claimed he had no official role, merely sharing what he thought was a private opportunity, the damage had been done. A photo emerged showing Milei meeting Harmlessly with one of the token’s architects, Hayden Mark Davis in person before the launch, blurring the line between casual interest and complicity.

Mechanics of the Scam: The “Rug Pull” Unfolds

At its core, $LIBRA was a memecoin rug pull, a deceitful scheme where developers launch a token, hype it, pump the price, then pull liquidity and exit with the profits, leaving investors holding worthless tokens.

Here’s how it played out:

• The token was coded on the Solana blockchain and paired with stablecoins or SOL in a liquidity pool on a decentralized exchange named Meteora.
• When Milei tweeted, the token value skyrocketed. With the market cap briefly topping $1 billion and prices reaching $4.50–$5.00 per coin, early investors (primarily insiders) profited massively.
• Within mere hours, wallets tied to the creators withdrew an estimated $80–$100 million, draining the liquidity pool. In technical terms, they removed the stablecoin backing and other funds, crashing the price by 85–90% almost instantly.
• Between 44,000 and 50,000 investors were impacted—many left clutching tokens with nearly zero value, while the creators kept the vast majority (about 70%) of the coin supply for themselves.

Though the infrastructure, smart contracts, Solana, decentralized exchanges, sounds technical, the scam was simple in essence: pump and dump with a political twist.

Milei’s Damage Control

As $LIBRA’s price plummeted, outrage erupted. Milei quickly deleted the original tweet and issued a public statement disavowing the project entirely. He said he had merely shared what he thought was a legitimate, private initiative, without due diligence or knowing the risks involved.

He insisted he had no financial or operational role, simply reacted impulsively, and that critics were using the collapse to attack him both politically and personally.

It wasn’t his first crypto-related stumble,he had previously endorsed CoinX, later shut down, and another NFT gaming token that crashed to zero. Those earlier missteps added fuel to the backlash, suggesting a pattern of uncritical crypto promotion by the president who cast himself as anti-corruption and anti-establishment.

Political Fallout: The Rise of “Cryptogate”

“Cryptogate” became a catchphrase. Opposition lawmakers accused Milei of either negligent recklessness or deliberate complicity. Multiple impeachment motions were introduced, but none advanced. Still, they stoked public scrutiny.

Instead, the lower house formed a special investigative commission. Government officials were summoned, but notably, Milei and his sister Karina were exempt. That was odd, especially because it came to light that Karina had met with $LIBRA’s organizers too.

To show transparency, Milei set up a Special Investigative Task Unit under the presidency. Yet, he later quietly dissolved the unit, claiming it had completed its mission. Skeptics saw this as a cover-up rather than a closure.

Legal and Regulatory Consequences

Argentina’s Response

Federal prosecutors opened criminal investigations, not just into the scammers, but into possible ties between them and the president’s circle. Key figures under scrutiny included Argentine businessmen who connected organizers with Milei’s team, and even one of Milei’s advisers who resigned amid revelations of prior connections.

A judge issued orders to freeze assets (bank accounts, properties, cars) of key individuals. Banking secrecy for Milei and Karina were also lifted to allow investigators to examine their finances. Authorities pursued international cooperation, and even issued an Interpol notice for Hayden Davis.

Transnational Legal Action

Meanwhile, dozens of foreign investors formed a class-action lawsuit in New York, accusing the $LIBRA organizers (including Hayden Davis and others) of fraud, conspiracy, racketeering, and unjust enrichment. The suit referenced a meeting at Argentina’s presidential palace—raising uncomfortable questions about Milei’s awareness.

A U.S. judge granted a temporary restraining order, freezing around $110 million in crypto assets,most notably, $57.6 million in USDC stablecoins. This freeze was enforced with the help of the stablecoin issuer, who locked the funds on-chain.

The Unfreeze: Judge Releases $57.6M in Stablecoins

In August, the judge in New York lifted the freeze, permitting Hayden Davis and associates to access the $57.6 million. The judge ruled that plaintiffs hadn’t demonstrated “irreparable harm” while preserving that the funds remained intact and untouched.

However:

• The assets remain technically frozen until Circle (the token issuer) unfreezes them.
• The court limited access by authorizing staged monthly withdrawals, not an immediate release.

Critics argue that once unbound, the funds could be moved or hidden, making restitution more difficult.

What’s Unfolding Next

Officials continue to sift through credit records, surveillance footage, and international leads. Reports surfaced of safety deposit box removals and cash movements right after the launch. Milei denies personal gain, but the probe is far from over.

The U.S. lawsuit barrels on. While the asset freeze is lifted, plaintiffs are continuing to press fraud and racketeering charges. If successful, investors could still see recovery through judgments, asset seizure, or negotiated settlements.

Crypto endorsement rules are under scrutiny. Lawmakers are discussing mandates for disclosures or vetting when public figures promote financial products. The $LIBRA case has served as a potent example of the real-world stakes in digital finance.

$LIBRA isn’t the first. Other tokens riding celebrity or political image like “$TRUMP” or TV show-themed coins have similarly surged and collapsed. Authorities are watching for networks behind $LIBRA to reappear under new schemes.

Spotlight: Hayden Mark Davis

Hayden Mark Davis, 28, is a tech entrepreneur from the U.S. He was the CEO of Kelsier Ventures, the company behind the $LIBRA token. Before the controversy, he was mostly unknown. In 2025, he became the face of a major crypto scandal.

Davis claimed he met President Javier Milei at the presidential palace in 2024. He said Kelsier Ventures had arranged an official $LIBRA promotion with Milei’s team. When the endorsement disappeared, Davis called it a betrayal. He said the deal had been formally agreed with the president’s office.

He denied being a scammer. He said he was a “launch advisor” and held about $100 million in crypto tied to $LIBRA. He claimed he planned to reinvest it, not use it for personal gain. He insisted the project wasn’t a “rug pull,” just an attempt at innovation that didn’t work out.

Davis also made bold claims. He reportedly said he could influence politics by bribing Karina Milei, the president’s sister. He gave no proof and denied making any payments.

Legal trouble followed. Argentine courts pushed for prosecution. U.S. courts froze his assets, $57 million in USDC and more in $LIBRA tokens. Some funds were later released under supervision.

Davis still defends himself. He says the project was real. He says he acted in good faith. He blames the collapse on lost support, not fraud. Also called $LIBRA a speculative memecoin and questioned whether New York courts had any right to judge the case.