Crypto Chaos in Argentina: Milei Caught in a Web of Scandal and Unlikely Players!
6 min read
Buenos Aires, Argentina (AP) — Argentine President Javier Milei is now at the center of a growing corruption probe over his promotion of a meme coin—a volatile and speculative cryptocurrency that’s been making waves, especially after Donald Trump and his wife, Melania, launched their own tokens.
Dubbed “Cryptogate” in Argentina, the scandal has drawn in a surprising mix of characters, from a high-profile U.S. influencer to a mysterious crypto developer known only as “Meow.” Adding another twist to the story, a 28-year-old American entrepreneur—who claims to have played a role in launching Melania Trump’s meme coin just last month—has also been linked to the controversy.
What’s the Deal with Meme Coins?
Meme coins are a quirky kind of cryptocurrency, often created as jokes based on internet memes, viral trends, or celebrities—without any real intention of revolutionizing technology or solving big problems. They come with goofy names like Dogecoin or even Fartcoin, and their value is often driven by hype rather than actual utility.
Critics, including many within the crypto world, argue that meme coins are nothing more than digital Ponzi schemes—designed to make insiders rich while leaving everyday investors holding the bag. But supporters see them differently, suggesting that meme coins could be early signals of how the internet is reshaping finance and digital transactions in unexpected ways.
“New technologies often start off looking like a toy but can evolve into something much more powerful over time,” Coinbase CEO Brian Armstrong recently pointed out in a social media post.
So, What Happened with Milei’s Meme Coin?
In short—total chaos.
Javier Milei, Argentina’s tech-savvy, chainsaw-wielding libertarian president, sent shockwaves through the crypto world when he promoted the newly launched meme coin $LIBRA on X last Friday. In his post, he claimed the project was “encouraging economic growth by funding small businesses and startups.”
Almost instantly, the coin’s value skyrocketed, pushing its market cap past $4 billion in a matter of hours. But just as quickly as it rose, it came crashing down. Early investors cashed out big, triggering a classic “rug pull”—a common crypto scam where insiders dump their holdings, causing the price to collapse and leaving everyday investors with huge losses.
As the fallout became clear, Milei quietly deleted his post and tried to distance himself from the project. But the damage was done. By Monday, dozens of criminal complaints had been filed, a judge was appointed to investigate allegations of fraud, and Argentina’s main opposition party even called for his impeachment.
By Friday, a federal prosecutor officially launched an investigation into Milei and five others for potential crimes including bribery, fraud, influence peddling, and abuse of authority.
Despite the scandal, Milei remains defiant, insisting he acted in good faith and has even asked Argentina’s Justice Ministry’s Anti-Corruption Office to investigate whether he—or anyone else—did anything illegal.
THE DEMONSTRATOR HOLDS A BANNER DEPICTING PRESIDENT JAVIER MILEI AND THE $LIBRA CRYPTOCURRENCY DURING A PROTEST ORGANIZED BY RETAIREES DEMANDING BETTER PENSIONS, IN BUENOS AIRES, ARGENTINA.
Who’s at the Center of This Scandal?
One of the key players in the $LIBRA fiasco is Hayden Davis, a 28-year-old American crypto developer who claims to be an adviser to Milei and played a role in launching the meme coin. However, Milei’s office has flatly denied having any connection to him.
In an interview with independent crypto journalist Stephen Findeisen, Davis didn’t hold back, bluntly admitting that meme coins are a rigged game where a select few insiders make massive profits while everyday investors take the hit.
“It’s an insiders’ game. This is an unregulated casino,” Davis said.
Despite the backlash, Davis insists $LIBRA wasn’t a scam, but rather an experiment meant to showcase the power of digital currencies—something he claims aligns with Milei’s vision of making Argentina a hub for financial innovation.
Adding another twist, Davis also revealed he was involved in launching Melania Trump’s meme coin last month—a coin that followed the same boom-and-bust cycle as $LIBRA, skyrocketing upon launch before crashing. The former First Lady’s office has declined to comment.
Trump Backs New Meme Coin as He Rides the Wave of His Pro-Crypto Agenda.
Donald Trump speaks at the Bitcoin 2024 Conference July 27, 2024, in Nashville, Tenn. (AP Photo/Mark Humphrey, File)
Who Else Was Involved?
Dave Portnoy, the founder of Barstool Sports and a well-known gambling enthusiast, was also pulled into the drama. He claims Davis tipped him off about $LIBRA before it went public and even asked him to help promote it. There were even talks about Portnoy interviewing Milei, much like he had done with Donald Trump during his first term.
Portnoy says he didn’t buy into $LIBRA until after Milei’s post on X, and when the price tanked, he lost money—though Davis later reimbursed his losses.
Then there’s “Meow”, the anonymous co-founder of a crypto firm involved in launching $LIBRA and other meme coins. In a social media post, Meow insisted that no one at the company engaged in insider trading or financial misconduct. But in a sign of how messy things have become, the company has hired a law firm to conduct an independent investigation—and one of its leaders has already resigned, citing “a lack of judgment.”
What’s Next for Milei?
Cryptogate is shaping up to be the first major scandal of Javier Milei’s presidency, and it could deal a serious blow to his credibility. The self-proclaimed economic outsider rose to power promising to slash inflation and wipe out corruption in Argentina’s political class. Now, his name is tied to a financial fiasco that’s left many wondering whether he’s just another politician caught up in the very system he vowed to dismantle.
Beyond the political fallout, there’s real concern about how this mess could impact Argentina’s standing with foreign investors—especially at a time when Milei is pushing for major economic reforms, trying to lift currency controls, and negotiating a crucial loan with the IMF.
Right now, he’s in Washington, meeting with Elon Musk and other big-name tech leaders, hoping to shift the conversation away from Cryptogate and back to his vision for economic transformation. But whether investors will still buy into his free-market revolution remains to be seen.
What About Meme Coins?
Love them or hate them, meme coins aren’t going anywhere—but if this latest saga proves anything, it’s that they remain highly unpredictable and risky as ever.
Even the Trump-backed meme coins saw their values plummet after an initial hype-fueled surge, drawing criticism from Democrats and even some crypto enthusiasts.
Others have learned the hard way, too. Hailey Welch, aka “Hawk Tuah Girl,” saw her internet fame crash and burn after her meme coin collapsed amid rug pull allegations. Meanwhile, Caitlyn Jenner is facing an ongoing class-action lawsuit from investors who claim they were duped into buying her $JENNER coin—though both Welch and Jenner have denied any wrongdoing.
Even governments are jumping on the trend. Earlier this month, the Central African Republic launched its own meme coin, only to see it spike briefly before crashing—just like so many others before it.
The Bottom Line
Meme coins continue to lure in investors chasing the next big score, but more often than not, they leave behind a trail of losses and controversy. Whether Cryptogate ends up being just a blip in Milei’s presidency—or a defining moment—will depend on how he handles the fallout.
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