Milei and LIBRA: Fraud, Connections, and Possible Legal Liability

By Antonio Tejeda Encinas, President Comite Euro Americano Digital Law , CEO Meta Channel Corp

The LIBRA scandal has ceased to be a mere anecdote of political malpractice and has become a time bomb for the administration of Javier Milei.

This is no longer just about the irresponsible promotion of a financial asset; new revelations indicate that there is a network of connections between the president and the architects of LIBRA, which heightens suspicions about his role in this case.

The article in La Nación (February 15, 2025)

reveals prior meetings between Milei and the creators of LIBRA, while the statement from the Cámara Argentina Fintech attempts to distance the sector from this scandal, suggesting that even within the crypto world there is concern about the legal consequences.

If doubts previously existed as to whether LIBRA was a mistake or a fraud, there are now concrete indications that it was a premeditated operation. Moreover, Milei’s track record with failed crypto promotions (CoinX, Vulcano Game) reinforces a systematic pattern of promoting unregulated assets that end up collapsing, with millions in losses for investors.

Connections That Reinforce the Suspicions

Mauricio Novelli, a trader close to Milei, met with him at the Casa Rosada months before the launch of LIBRA.

Julian Peh, CEO of Kip Protocol, the company that created LIBRA, also held meetings with Milei outside the seat of government.

Hayden Mark Davis, founder of Kelsier Ventures and the person responsible for the launch of LIBRA, claimed to be an advisor to Milei and asserted that the president initially supported the project.

Was LIBRA designed to manipulate the market?:

The project’s website was created on the very day of the launch, with no solid track record.

Bots artificially inflated the price after Milei’s tweet.

Eight wallets withdrew $107 million minutes before the collapse, in a manually orchestrated “rug pull”.

Therefore: LIBRA was not a genuine cryptocurrency, but an alleged scheme designed to manipulate the market. And most seriously, the architects of this scam have a track record of collaboration with Milei.

The Cámara Argentina de Fintech Tries to Distance Itself from the Scandal

On that same February 15, 2025, the Cámara Argentina Fintech issued a statement ( see image (attempting to distance the crypto industry from the LIBRA case.

Key points of the statement:

They claim that LIBRA is an isolated case and does not represent the Argentine crypto ecosystem.

They insist on the need for transparency and regulation in the sector.

They highlight that Argentina transacted more than $91.1 billion in crypto in 2024, reinforcing the idea that crypto technology is legitimate but needs legal certainty.

What stands out?: Its swift distancing suggests that LIBRA is viewed within the sector as an obvious fraud, increasing suspicions of financial manipulation.

Investigation by the Anti-Corruption Office (OA): An internal inquiry was opened to determine whether there was improper conduct or conflicts of interest within the government.

Creation of the Investigative Task Unit (UTI): A specialized team to gather information on the launch of LIBRA and refer it to the courts.

Milei’s distancing: He deleted his post and denied knowing the details of the project, attributing it to a “communication error”.

Warning from the CNV: The National Securities Commission called for strengthening the regulation of crypto assets to prevent similar frauds.

These actions look more like an attempt at damage control than a genuine effort to clarify the fraud. Without structural changes in crypto regulation, cases like LIBRA will keep happening with impunity.

Although Milei’s promotion of LIBRA has had a strong political and economic impact, the legal measures currently in force in Argentina do not appear forceful enough to sanction this type of conduct.

Shortcomings in the Current Legislation:

Public Ethics Law (Law 25,188): It does not provide for direct criminal penalties and only allows administrative disqualifications.

Criminal Code – Illicit Enrichment (Art. 268): Difficult to apply if the gains cannot be directly linked to Milei.

Commercial Fair Dealing Law (Law 22,802): It has no precedent of being applied to a president.

Capital Markets Law (Law 26,831): LIBRA was not registered as a negotiable security, which complicates its application.

Therefore: Without stricter regulation, these legal loopholes will continue to allow public figures to promote fraudulent projects without real consequences.

Urgent Reforms to Prevent New Scams

Reform of the Public Ethics Law: Explicitly prohibit the promotion of investments without prior regulation.

Specific regulation for crypto assets: Mandatory registration with the CNV and transparency regarding ultimate beneficial owners.

Harsher sanctions for fraudulent advertising by public officials: Amend the Commercial Fair Dealing Law to include clear penalties.

Criminalization of crypto market manipulation: Incorporate penalties into the Criminal Code for cases like LIBRA.

A Government Involved or Merely Complicit?

The LIBRA scandal is not just another story of crypto fraud, but the reflection of an administration that, under the pretext of deregulation and “market freedom”, has opened the doors to shady financial schemes without any kind of oversight.

If the government truly did not know the background of LIBRA, then it is guilty of alarming negligence. If, on the contrary, key figures within the ruling party took part in its promotion knowing what was happening, we are facing an even more serious case: an attempt at market manipulation from the highest spheres of power.

LIBRA is not just a crypto scam; it is a symptom of an alleged model of power that uses the digital economy to manipulate the market and profit from deregulation, without assuming any responsibility.