Key Takeaways:
- President Milei received harsh criticism for backing a cryptocurrency that collapsed as soon as it was promoted.
- The situation drew comparisons to Trump’s involvement with meme coins and raised ethical concerns.
- His political rivals are reportedly moving forward with impeachment proceedings in response to the scandal.
The political arena of Argentina is drowned in a tough situation in which President Javier Milei is facing a controversy related to the cryptocurrency, $LIBRA he was promoting. The coin was suddenly introduced as a tool for economic growth, causing its value to skyrocket to nearly $5 overnight before crashing, leaving many investors at a loss. Accusations of a “rug pull” surfaced after panic—allegedly triggered by the developers—caused the cryptocurrency’s price to swing uncontrollably. The incident sparked intense public debate about the ethical responsibilities of political leaders, drew comparisons to Donald Trump’s controversial involvement in the crypto industry, and triggered impeachment efforts.
$LIBRA’s Rollercoaster Ride: From Presidential Endorsement to Market Collapse
The controversy began with a bold Twitter post by President Milei, who is well known for his online influence, on a Friday night. President Milei, who can use his remarkable online presence to his advantage, recommended to his followers the purchasing of $LIBRA, which he sees as a solution for the Argentine economy and a tool to promote small businesses. The immediate consequence was evident. The president, who was then actively supporting the currency, managed to persuade investors who immediately bought the token that they would raise its value to almost $5 in a couple of hours. Its market capitalization was recovering even after aning a mountainous high value that lasted for hours. At one time it registered a market capitalization of over $4 billion, which made it look as a thriving new asset.
Nevertheless, the euphoria experienced here turned out to be very short-lived. Concerns quickly emerged as observers scrutinized $LIBRA’s structure and operations. The talks of a “rug pull,” that is, a common cryptocurrency swindle where developers foster the token’s price to a great extent and then in a sudden manner they vanish along with the investors’ money, gained traction.
A note from a community about X, which used to be Twitter, warned the users to be cautious about the hazards, giving information about suspicious patterns that were in fact a rug pull. This became a premiere indicator, by then people had already lost money.
Understanding “Rug Pulls” in the Crypto Landscape: Just picture a VIP who one day endorses a new stock and calls it the next high of the year, who wouldn’t believe it. Now, thousands of common people join, and this causes the stock price to soar. However, the celebrity along with some of his partners quietly dispose of their shares at maximum prices, after which their firm’s stock price crumbles to the ground and everybody else merely cries for their losses. This is the main idea of a rug pull, a depressing manipulation of the investor’s trust.
During the time of the maximum trading activity, wallets that were connected to the token began to cash out and they led to a fast depreciation of the asset. Right after it, for a few hours, $LIBRA had collapsed nearly 20% of its high with lots of smiling investors who had lost their fortunes and they got the rest of the holdings, which were barely worth their expectations.
$LIBRA had collapsed nearly 20% for a few hours.
Milei’s Retreat: Damage Control and Political Fallout
Amid mounting criticism, President Milei deleted his endorsement post after just five hours. Subsequently, he issued a statement on X, in which he tried to dissociate himself from the project. “I was not familiar with the details of the project,” he wrote, “and after having informed myself I decided not to continue disseminating it (that is why I deleted the tweet).”
Today’s attempt to control damage, nevertheless, was not enough to put the storm down. Opponents branded Mr. Milei with fooling allegations, stressing that he had wrongly supported a highly risky start-up without doing the required assessment of the seriousness of the deal and even potentially misleading his supporters and the public in general.
Some people have been comparing what’s been going on right now with how the last President of the U.S. Donald Trump was involved in meme coins of which one was $Trump, who also had a bumpy ride with changes of price and the whole thing was seen as desperate by some whereas others saw it the right way to promote the use of such speculative assets by political leaders.
More News: Trump Promotes Memecoin on X: Community Suspects Hacked Account
The Trump Comparison: A Pattern of Unconventional Endorsements: Trump’s experiments with digital currencies,
