Milei and LIBRA: fraud, connections and possible legal liability

By Antonio Tejeda Encinas, President of the Euro-American Committee of Digital Law - CEA Digital Law, CEO of Meta Channel Corp

The LIBRA scandal is no longer a mere anecdote of political malpractice; it has become a ticking time bomb for the administration of Javier Milei.

This is no longer just about the reckless promotion of a financial asset: new revelations point to a network of connections between the president and the architects of LIBRA, heightening suspicions about his role in the affair.

The article in La Nación (15 February 2025)

reveals earlier meetings between Milei and LIBRA’s creators, while the statement from the Argentine Fintech Chamber seeks to distance the sector from the scandal, suggesting that even within the crypto world there is concern about the legal consequences.

If there were once doubts 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 of failed crypto promotions (CoinX, Vulcano Game) points to a systematic pattern of promoting assets with no oversight that end up collapsing, leaving investors with losses running into millions.

Connections that reinforce the suspicions

Mauricio Novelli, a trader close to Milei, met him at the Casa Rosada months before LIBRA was launched.

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

Hayden Mark Davis, founder of Kelsier Ventures and the person responsible for launching LIBRA, claimed to be an adviser to Milei and stated that the president had initially backed 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 behind it.

Bots artificially inflated the price after Milei’s tweet.

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

In short: LIBRA was not a genuine cryptocurrency but an alleged scheme designed to manipulate the market. And most serious of all, the architects of this scam have a history of working with Milei.

The Argentine Fintech Chamber tries to distance itself from the scandal

On the same day, 15 February 2025, the Argentine Fintech Chamber issued a statement (see image) seeking to distance the crypto industry from the LIBRA case.

Key points of the statement:

It maintains that LIBRA is an isolated case and does not represent Argentina’s crypto ecosystem.

It stresses the need for transparency and regulation in the sector.

It points out that more than $91.1 billion in crypto was transacted in Argentina in 2024, reinforcing the idea that crypto technology is legitimate but needs legal certainty.

What stands out? The Chamber’s swift distancing suggests that, within the sector, LIBRA is seen as an obvious fraud, which only adds to suspicions of financial manipulation.

Investigation by the Anti-Corruption Office (OA): an internal inquiry was opened to determine whether there had been any misconduct or conflict of interest within the government.

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

Milei distances himself: he deleted his post and denied knowing the details of the project, putting it down to a ‘communication error’.

CNV warning: the National Securities Commission called for stronger regulation of crypto-assets to prevent similar frauds.

These actions look more like damage control than a genuine effort to get to the bottom of the fraud. Without structural changes to crypto regulation, cases like LIBRA will go on 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 robust enough to punish this kind of conduct.

Shortcomings in current legislation:

‘Ley de Ética en la Función Pública’ (Public Ethics Act, Law 25,188): provides for no direct criminal penalties and allows only administrative disqualification.

‘Código Penal’ (Argentine Criminal Code) – illicit enrichment (Art. 268): difficult to apply if the gains cannot be linked directly to Milei.

‘Ley de Lealtad Comercial’ (Fair Trading Act, Law 22,802): has never been applied to a president.

‘Ley de Mercado de Capitales’ (Capital Markets Act, Law 26,831): LIBRA was not registered as a security, which makes the Act difficult to apply.

In short: without stricter regulation, these legal loopholes will continue to allow public figures to promote fraudulent projects with no real consequences.

Urgent reforms to prevent further scams

Reform of the Public Ethics Act: explicitly prohibit the promotion of investments that have not been regulated beforehand.

Specific regulation of crypto-assets: mandatory registration with the CNV and transparency about ultimate beneficial owners.

Tougher penalties for fraudulent advertising by public officials: amend the Fair Trading Act to include clear penalties.

Criminalising crypto market manipulation: introduce penalties into the Criminal Code for cases such as LIBRA.

A government involved, or merely complicit?

The LIBRA scandal is not just another tale of crypto fraud; it reflects an administration that, under the pretext of deregulation and ‘market freedom’, has opened the door to murky financial schemes without any kind of control.

If the government genuinely knew nothing of what lay behind LIBRA, it is guilty of alarming negligence. If, on the other hand, key figures within the ruling party took part in promoting it knowing what was going on, we are looking at an even more serious case: an attempt to manipulate the market from the highest echelons 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 taking any responsibility.