Argentina President Milei Backpedals on LIBRA Meme Token After 89% Plunge in Value

• President Javier Milei withdrew his support for LIBRA, citing a lack of due diligence.
• LIBRA’s price crashed nearly 89% within hours, with allegations of a pump-and-dump scheme.
• On-chain analysts flagged suspicious fund movements and centralized control of the token supply.

Argentina’s President Javier Milei has retracted his endorsement of the LIBRA meme token, stating he had no connection to the project. His reversal comes after the token’s price tanked almost 89% in just hours, sparking alarm in the crypto community.

Milei had initially promoted LIBRA in a now-deleted post on X, linking it to the Viva La Libertad Project, which claimed it would help Argentina’s economy by funding small businesses. 

However, after learning more details, he took down his tweets and clarified that he had not conducted proper due diligence before endorsing the project. In his words:

<blockquote> “I initially supported a supposed private enterprise with which I have no connection. After becoming aware of the details, I decided to discontinue spreading the word.” <blockquote>

LIBRA’s Price: Up Fast, Down Faster

Right after Milei’s initial endorsement, traders rushed in to buy LIBRA, pushing its market capitalization to $4.5 billion. 

Yet, as doubts about the project’s legitimacy started to spread, the token’s price collapsed from $4.50 to $0.50. Trading volume reached $1.1 billion in just a few hours before the sell-off intensified.

Related: Central African Republic’s CAR Memecoin Launch Marred by Deepfake Claims & Suspended Domain

Centralization Red Flags

Digging through blockchain data showed that 82% of LIBRA’s total supply was held in just a few wallets. This immediately raised red flags about centralized control. 

On-chain analytics firm Bubblemaps reported that the project’s developers had withdrawn $87 million from liquidity pools, speeding up the token’s downward spiral.

Adding to the concerns, Chainalysis pointed out that the address that created the LIBRA token and the one holding a major portion of its supply, seemed to be controlled by a single private key, not a more secure multi-signature setup.

Milei’s Past Crypto Missteps

This LIBRA situation isn’t the first time Milei has faced criticism for promoting crypto. In 2021, he endorsed CoinX, which turned out to be an alleged Ponzi scheme. CoinX promised big returns through AI-powered trading. 

Later on, investors sued Milei for losses between 30 and 40 million Pesos ($300,000) after after regulators shut down CoinX.

Related: Presidential Candidate of Argentina Faces Lawsuit for Crypto Scam

The LIBRA incident mirrors the launch of $TRUMP, a meme coin linked to the U.S. President Donald Trump in January. 

While $TRUMP turned out to be legitimate, LIBRA did not, However, both tokens caused a surge in trading activity followed by uncertainty over their authenticity.