Argentine President Javier Milei is facing a legal investigation and impeachment calls after he promoted a cryptocurrency that quickly collapsed.
Milei endorsed the $libra meme coin Friday in social media posts. He said it would boost the country's economy by funding small businesses and entrepreneurs.
His endorsement sent the token soaring from almost nothing to above $4 — before it fell to less than $0.50 just hours later after the posts were deleted, Reuters reported.
Observatorio del Derecho a la Ciudad, a nongovernmental organization in Argentina, said some 40,000 people had been affected, with losses above $4 billion.
Argentina's main stock index closed more than 5% lower on Monday.
Meme coins are sometimes based on internet jokes and fads, such as doge. Personalities have also jumped on the bandwagon to launch their own tokens, including the boxer Floyd Mayweather Jr. — and even President Donald Trump and Melania Trump, the first lady.
The launch of the $Trump and $Melania coins last month sparked anger in the crypto world, with some commentators saying the Trumps were making a mockery of the industry.
A 'rug pull'
Lawyers in Argentina filed fraud complaints in criminal court over the weekend. Some have speculated that the case against Milei could be classified as a "rug pull," when promoters of a coin attract buyers but then stop trading before it crashes, which allows them to pocket some of the proceeds.
Jonatan Baldiviezo, one of the plaintiffs, told The Associated Press that the president's actions meant a "crime of fraud was committed."
A judge was assigned on Monday to investigate the case.
Argentina's main opposition coalition said it would move forward with its push to impeach Milei, writing in an X post that his involvement in the coin was an "unprecedented scandal."
Milei's office said Sunday in a statement on X that the president "shared a post on his personal accounts announcing the launch of the KIP Protocol project, just as he does daily with many entrepreneurs who want to launch a project in Argentina to create jobs and get investments."
It added: "Not having been part of any stage of the development of the cryptocurrency, after the repercussions that the launch of the project had and to avoid any speculation and not give it further dissemination, he decided to delete the post."
KIP Protocol said on X it was involved with distributing project funds to businesses in Argentina and did not have any role with the coin itself.
Milei's office said the president held a meeting in October with KIP Protocol when he was told about the Viva La Libertad Project, which aimed to finance startups in Argentina using blockchain technology. The $libra coin was intended to help to raise funds for the project.
KIP Protocol said in a statement on X that its CEO, Julian Peh, met the president at a trade forum, adding: "There was no discussion or mention of any specific initiatives including the project ('Viva la Libertad') and launching any tokens."
Meteora fallout
Ben Chow, a cofounder of Meteora, the platform behind $libra, has stepped down following the controversy, a statement on X from Meow said Tuesday.
Meow cofounded Meteora and is behind Jupiter, which calls itself "one of the largest decentralized trading platforms and one of the most active governance communities in crypto."
The statement said Chow had "shown a lack of judgment and care about some of the core aspects of the project (given its current size and reputation) over the past couple of months" and had "chosen to resign."
Meow also said in the statement: "No one at Jupiter or Meteora committed any insider trading or financial wrongdoing, or received any tokens inappropriately."
The law firm Fenwick & West has been hired to investigate and plans to independently publish a report, Meow added.
It's unclear why Meow uses a pseudonym. He was seen in a video interview in February 2024 on the YouTube crypto channel The Defiant.
On his website, Meow calls himself a "Cat @ Jupiter," adding: "Previously, lead adviser at Instadapp, Fluid, Kyber and Blockfolio. I was one of the founding contributors to Handshake. Also started Meteora, home to the best liquidity protocols and LP army."
