Argentine President Javier Milei made a post on social network X (formerly Twitter) about the Libra memecoin, causing it to rise sharply, but in just a few hours it collapsed. The incident caused a scandal and a wave of criticism from the Argentine opposition, which even started talking about impeachment proceedings, CNN reports.
At the time of the cryptocurrency's launch, most of its supply was concentrated in a few digital wallets, and the initial price was almost zero. However, after the publication of Milei, its value rose sharply to almost $5, and then fell to a few cents in less than three hours, according to trading platforms.
In his post, Milei called Libra "a private project aimed at boosting the growth of the Argentine economy," adding the Solana contract address associated with the token.
According to market data, Libra's trading volume reached $1.1 billion, but the imbalance between buy and sell orders was questionable. There were 74,500 buy orders versus 28,900 sell orders, with the large sales outweighing the excitement among retail investors.
Cryptocurrency cybersecurity specialist Pablo Sabbatella told CNN that Milei shared a "smart contract" - a kind of interbank code on the Solana blockchain platform. Solana-based tokens have recently become popular among investors looking for high-risk digital assets.
"The first thing I saw was that the website had been registered yesterday (Friday); (which) is typical of a scam," Sabbatella explained, adding that the cryptocurrency was created just minutes before Milei's post. He described the situation as a classic "pump and dump" scheme where large asset holders, known as "whales," buy cryptocurrency at a low price, artificially increase its value through hype, and then sell it en masse, making a huge profit.
"I noted that he saw accounts that bought at very low levels earning more than $4 million in two hours, and one that earned up to $87 million," said Sabbatella.
As soon as it became known about the memcoin collapse, Argentine President Javier Milei deleted his message about it. At the same time, he denied any ties to Libra, saying that he did not know the details of the project.
However, the political consequences of the scandal were not long in coming: the opposition coalition Unión por la Patria announced that it would initiate impeachment proceedings against the president, accusing him of irresponsible use of the presidential platform.
Milei's supporters reject the impeachment demands. MP Diego Santilli called them an attempt to "overthrow" the president.
Security Minister Patricia Bullrich also defended Milei, saying in an interview with Radio Rivadavia that the president has the right to freedom of expression. She compared his post on social media to a visit to the plant, explaining that it "does not mean creating a lobby for this enterprise."
The Libra crash affected the entire memecoin market, causing significant losses in other tokens. In particular, $TRUMP, another popular memecoin, lost $500 million in market capitalization in just 30 minutes after Libra's crash began.