BUENOS AIRES, Argentina — Argentine President Javier Milei is facing a corruption probe into his promotion of a meme coin, which is a highly speculative form of cryptocurrency that’s surged in popularity after President Donald Trump and his wife launched tokens of their own.
The budding scandal in Argentina has been dubbed locally as “cryptogate” and has links to a diverse cast of characters, including a high-profile U.S. influencer, a crypto developer who uses the pseudonym “Meow,” and a 28-year-old American entrepreneur who said he helped launch first lady Melania Trump’s meme coin last month.
Here’s an explainer on what happened and where things stand:
Meme coins are a type of cryptocurrency that are generally just goofs on internet memes, viral moments or celebrities that aren’t trying to make use of a new technology or solve any new problems. They often have silly names, like Dogecoin, or Fartcoin.
Critics – including many cryptocurrency enthusiasts — say they are nothing more than digital Ponzi schemes that exist to enrich insiders at the expense of retail investors. Those more supportive say meme coins shouldn’t be so easily dismissed and could be early indicators of ways in which the internet could revolutionize financial and other transactions.
“New technologies often look like a toy but evolve into something much more powerful over time,” Coinbase CEO Brian Armstrong said in a recent social media post.
In short, a disaster.
Milei, the tech-loving, chainsaw-wielding, libertarian president of Argentina, posted on X about the meme coin $LIBRA on Friday, just after it had launched, stating he was “encouraging economic growth by funding small businesses and startups.”
The coin’s price soared almost immediately, pushing the market value for the project beyond $4 billion.
A few hours after launch, early holders of the coin started cashing out of the project and its price collapsed.
The trajectory of $LIBRA’s price had the hallmarks of a “rug pull,” a not uncommon phenomenon with meme coins. Rug pulls occur when insiders dump their holdings in newly launched meme coins that are soaring in value, which tanks the price and causes losses to newer investors.
Milei deleted his initial post after the price collapsed and distanced himself from the project. By Monday, dozens of criminal complaints had been filed, a judge in Argentina had been selected to investigate allegations of fraud and Argentina’s main opposition party called for his impeachment.
On Friday, a federal prosecutor formally opened the probe to determine the involvement of Milei and five others in the creation and promotion of $LIBRA, for the possible crimes of bribery, fraud, influence peddling and abuse of authority.
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