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Federal Judge in Argentina Investigates Milei Crypto Scandal as Stock Index Declines

An Argentine judge was appointed on Monday to investigate President Javier Milei's involvement in promoting a cryptocurrency that quickly plummeted, sparking the latest controversy surrounding the libertarian leader.

Milei had recommended the little-known crypto coin $LIBRA in a now-deleted post on X, leading to a short-lived price surge before its sharp decline. The fintech chamber suspects a "rug pull" scam, where backers inflate the value before withdrawing, leaving investors empty-handed.

Opposition lawmakers are questioning Milei's actions despite his positive reception among investors for his austerity measures combating inflation, which caused the country's stock index to drop by 5.6%.

Judge Maria Servini was randomly assigned to the case after numerous complaints were filed domestically and in the U.S. Wise Capital described the situation as a crisis for Milei's administration, with the $LIBRA token now considered a hoax.

A lawsuit filed by a local NGO accused Milei and other officials of fraud and abuse of public office, alleging a $4 billion loss affecting over 40,000 people.

Although a government source claimed Milei was deceived, allegations against him persist, potentially impacting his government's credibility as midterm elections approach. Chow, co-founder of the exchange where $LIBRA launched, denied direct involvement beyond IT support.

While impeachment seems unlikely, ongoing scrutiny may weaken Milei politically. Some investors accused him of fraud, contrasting with his supporters who see him as a victim of political targeting.

In response to critics, Milei maintained his stance in an online post, emphasizing his determination to counter his adversaries amid the controversy.