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Did Argentina’s President Javier Milei unknowingly trigger a crypto crash? The LIBRA token surged after his now-deleted endorsement but soon plummeted, leaving 86% of traders in losses. Blockchain analysts revealed that $99 million was withdrawn by wallets linked to the token's creator, sparking accusations of insider trading and market manipulation. As the controversy deepens, demands for stricter crypto regulations and transparency are growing louder.
Milei has recently promoted LIBRA in a post on their X account that has already been deleted. In consequence, the price of the token would tremendously rise as much money poured in. Hours later, however, its price would collapse, giving rise to suspicion of market manipulation.
Blockchain research firm Chainalysis identified eight wallets linked to LIBRA’s creator that withdrew $99 million worth of assets from the token’s liquidity pool. These wallets had received tokens directly from the creators, suggesting insider profit-taking. Another firm, Nansen, confirmed that traders collectively lost around $251 million, while a small group of insiders walked away with $180 million in gains.
Milei has denied the charges that he had a part in launching the token and claimed that political opponents took advantage of the opportunity. The ongoing case, however, shall invite the intervention of a federal judge to investigate the allegations against him. The debate has also caused uproars about political figures using supporters to avoid certain risks regarding volatile crypto assets.
Besides the LIBRA project, Hayden Davis is also the manager of Kelsier Ventures. Davis has underlined that he held about $100 million from the token marketplace. In the interview done by crypto investigator Coffeezilla, Davis maintained that it was a plan gone wrong rather than a premeditated fraud act. Whatever he claims, the chapter has raised issues about insider trading and market manipulation.
Not only did LIBRA fell off its perch, but the whole of cryptocurrency did, affecting Solana, the very blockchain on which the token was built. From $12.1bn, the TVL, or total value locked, on Solana has quickly dropped to $8.29bn, and investors are now jittery about future events.
This is a case that stands to serve as a reminder to everyone with an investment in meme coins. These are usually fueled by hype and speculation and then swing erratically, sometimes going up for a short period. Although some traders make money from these short-lived jumps, almost all will lose in the long run when prices return to earth.
The LIBRA failure has brought increasing focus on Argentine and global crypto regulations. Policymakers and regulators are currently advocating for tightened controls on promotions of crypto products, especially with public figures involved. Investors at the same time are demanding greater transparency in the crypto market to curb such market manipulation.
The LIBRA token scandal is already a clear indication of speculative crypto investments' risks, coupled with continuing investigations and pending lawsuits against the project. As authorities dig deeper, the full extent of insider activity behind the token's rapid rise and fall may soon come to light.
