Argentina has officially launched a government-backed investigation into the crash of LIBRA, a memecoin that went viral and then collapsed within 48 hours. The probe, approved by Congress, comes after over $250 million in investor losses and growing public outcry. What began as a seemingly harmless promotional repost by President Javier Milei has turned into one of the country’s most controversial financial events in recent history.
1. The Post That Started It All
On February 14, 2025, President Milei reshared a social media post promoting LIBRA, presenting it as a tool to empower Argentina’s small businesses. That single repost sent the token’s value soaring. Within hours, LIBRA’s market cap surged to $4.5 billion. It became the most talked-about asset in the local crypto scene. But just 48 hours later, it all came crashing down.
2. $250 Million in Losses, Few Winners
LIBRA lost over 95% of its value in two days. Investors who had rushed in during the hype were left with near-worthless tokens. According to blockchain analytics firm Nansen, over 86% of buyers suffered losses. The total estimated value wiped out? Around $251 million. While thousands lost money, a few wallets dumped their holdings just before the collapse. Two addresses alone reportedly made over $5 million in profit. Their timing raised major red flags and sparked allegations of insider activity.
3. Milei Denies Responsibility Amid Public Rage
Following the crash, attention turned to President Milei. Critics claimed his post lent legitimacy to the token. Protesters accused him of indirectly enabling a financial scam. Milei responded by denying any formal role in the project. He stated that the repost was spontaneous and that he had no ties to LIBRA or its creators. However, the backlash didn’t fade. Over 100 legal complaints were filed within a week. Pressure mounted on lawmakers to act.
4. Argentina’s Congress Takes Action
On April 8, 2025, Argentina’s Chamber of Deputies voted to launch a formal inquiry into the LIBRA scandal. This was not a symbolic gesture. A dedicated investigative commission has been created to examine the origins, mechanics, and collapse of the project. The investigation will cover who launched LIBRA, how it gained traction, and whether public officials were involved in any market manipulation. The commission has subpoena power and is expected to interview top government officials including the Chief of Staff, Ministers of Economy and Justice, and the Chair of the National Securities Commission (CNV).
5. Criminal Investigation and Asset Freezes
In parallel, Federal Prosecutor Eduardo Taiano has opened a separate criminal investigation. His office has already requested the freezing of more than $110 million in assets connected to the LIBRA project. Both fiat accounts and crypto wallets are under review. Taiano is also seeking metadata, deleted posts, and internal communications from those who promoted the token. His office suspects a coordinated fraud scheme, with influencers and developers potentially colluding to pump and dump the asset.
6. The Broader Economic Fallout
LIBRA’s collapse didn’t just hit crypto holders. It rattled Argentina’s entire financial ecosystem. The S&P Merval index dropped over 5% in the days following the crash. Institutional traders grew cautious, and liquidity in local exchanges fell sharply. Retail investors expressed fear, not just about crypto, but about the integrity of public messaging. Confidence in both digital assets and political figures took a serious hit.
7. LIBRA’s Pitch: Community or Cover?
At its peak, LIBRA was marketed as a patriotic solution to economic instability. Its branding focused on nationalism, entrepreneurship, and anti-inflation. But under scrutiny, it lacked transparency. The team was anonymous. There was no whitepaper, no audit, and no roadmap. The only real endorsement came from a repost by a sitting president. That alone was enough to drive thousands to invest. When the hype died, so did the project. And trust went with it.
8. Political Endorsements in the Crosshairs
LIBRA has reignited the debate over the role of public figures in promoting financial products. Should politicians be allowed to share crypto content? Should such posts be treated as official endorsements? These questions are now being debated in Congress. Lawmakers are exploring whether to impose new regulations on political communication related to financial instruments, especially crypto. LIBRA may end up triggering the first major legal reforms on this issue in Argentina.
9. New Crypto Laws on the Table
Congress is already drafting legislation aimed at closing regulatory gaps. Proposed reforms include: banning public officials from promoting unregistered tokens, requiring full project audits before listings, mandating influencer disclosures, and creating an investor watchdog agency. These changes would place Argentina at the forefront of crypto regulation in Latin America. Lawmakers hope these laws will prevent similar disasters and restore investor confidence.
10. A Regional Wake-Up Call
The LIBRA incident has become a warning sign across Latin America. Countries with unstable economies often turn to crypto as an alternative to fiat volatility. But as LIBRA shows, a lack of regulation and unchecked hype can destroy trust overnight. If Argentina pushes forward with a successful investigation and passes new protections, other nations may follow. This could reshape the crypto landscape throughout the region.
Final Thoughts
LIBRA wasn’t just a meme token. It was a test of Argentina’s political, legal, and financial systems. The coin’s collapse sparked nationwide outrage, multiple investigations, and potentially game-changing legislation. Now, with a formal inquiry underway and prosecutors following the money, Argentina is taking its first real steps toward regulating crypto and holding public figures accountable. Whether LIBRA becomes a case study in justice or remains a cautionary tale depends on what happens next. But one thing is clear—this time, Argentina isn’t sweeping it under the rug.
Disclaimer:
This article is for general information purposes only. It does not constitute legal, investment, or financial advice. Always consult with a licensed professional before making any investment decisions.