Libra Memecoin Backed by Argentina's President Javier Milei Sparks Rug Pull Concerns: All Details

The crypto market took a hit over the weekend following a memecoin controversy. Argentina's President Javier Milei promoted the Libra memecoin on his official X account last Friday. According to the Buenos Aires Herald, his now-deleted tweet claimed the token could boost the national economy. Reports indicate that within hours of launch, Libra's price surged 3,000 percent, pushing its market cap to $4.5 billion (roughly Rs. 39,090 crore). However, the buying frenzy was short-lived.

The Rise and Fall of Libra

President Milei's endorsement quickly drew global crypto investors to the Libra memecoin. Within hours of its launch, its value surged and then plummeted, sparking widespread rug-pull speculation on social media. In a typical rug-pull, developers launch, promote, and inflate a crypto project before abandoning it—leaving investors with losses while they profit.

In a tweet analysing the token, Arkham Intelligence said it was based on the Solana blockchain. After the valuation of the memecoin exceeded $4 billion (roughly Rs. 34,730 crore), things reportedly started to change. President Milei's tweet promoting the token was deleted from his X handle – raising suspicions about the legitimacy of the post. This led to the price of the token dropping by 95 percent.

Eight crypto wallets that have been identified to be linked to the Libra token collectively hold 83 percent of the token supply, The Block reported over the weekend, citing data by LookOnChain.

A blockchain analytics tool, LookOnChain has been tracking the Libra token throughout the weekend. On February 15, it claimed that the ‘Libra team' internally cashed out $107 million (roughly Rs. 929 crore) by “adding liquidity, removing liquidity and claiming fees”.

As per crypto firm Imk, over 24 wallet addresses recorded losses of over $1 million (roughly Rs. 8.68 crore) after Libra price sunk.

The price of the Libra token, that had climbed to $5 (roughly Rs. 435) after its launch, presently stands at $0.3678 (roughly Rs. 31), as per DEX Scanner. Its present market cap is $367.8 million (roughly Rs. 3,195 crore).

Aftermath of Libra Collapse

Early on February 15, President Milei tweeted a warning, advising people to avoid engaging with Libra.

“I was not aware of the project's details, and after becoming informed, I decided not to continue promoting it (that's why I deleted the tweet),” he said, adding that this was a political attack on him.

Several Argentine lawyers have now filed complaints against President Milei, accusing him of promoting fraud. As per the Associate Press, the President's office has denied his involvement in the creation of the crypto token.

Key Details Related to the Controversy

Crypto intelligence firm Bubblemaps has linked the team behind Libra memecoin to those behind the recently launched memecoins of US President Donald Trump and First Lady Melania Trump. Both $Trump and $Melania followed a similar pattern to Libra, with initial price surges followed by sharp declines.

Hayden Mark Davis identifies himself as the launch strategist for Libra. In a YouTube video he admitted to overseeing the Libra and Melania token launches.

An AI-focussed Web3 firm called The Kip Protocol, that has been named by the Argentina government as being related to Davis, has denied any links to him. “KIP had no business dealings with Hayden Mark Davis (“Davis”). At no time did Mr Peh (CEO) or any other employee of KIP Protocol make any representations about Davis being a partner of KIP or any other representations about Davis. At no time was Davis a employee or representative of KIP Protocol,” the firm has said.

The Kip Protocol also said that the launch of the Libra token was handled by a firm called Kelsier Venturer, which is represented by Davis.

Several details around the Libra token debacle still remain unclear as of now.