Argentina’s $250M Crypto Scandal Deepens: Milei Shuts Down Probe Into $LIBRA Meltdown

Key Takeaways:

President Javier Milei’s controversial decision to dissolve a special unit investigating the $LIBRA cryptocurrency scandal has raised alarm over transparency and accountability in Argentina’s crypto market. The probe’s shutdown comes just months after Milei publicly promoted the coin, which later crashed and left retail investors with massive losses.

Read More: Amid Increasing Crypto Scandal, Argentina Starts Official Investigation Into $LIBRA Memecoin Crash

$LIBRA Promotion Followed by Collapse

The $LIBRA token made headlines after its explosive debut on February 14, 2025. Promoted directly by Milei via social media as a “private project” to stimulate the Argentine economy, the memecoin surged in value following his endorsement. Within hours, however, the token plummeted by nearly 90%, wiping out millions.

Despite the dramatic collapse, more than $4.5 billion had reportedly moved through $LIBRA during its peak. Estimates suggest that investors—many of them retail traders—lost at least $250 million in the fallout. Blockchain analysts later called the event a classic rug pull, a scheme where developers exit after a token’s price peaks, leaving buyers with worthless holdings.

Read More: Argentina’s Stablecoin Boom After Government Suggestion of Abandoning Currency Controls

Milei Dissolves Investigative Unit

Just five days after the crash, Milei established the Investigative Task Unit (UTI) under the Ministry of Justice. The unit was tasked with examining any misconduct, coordinating with national regulators, and submitting evidence to the judiciary.

On May 20, however, Milei abruptly signed Decree 332/2025, co-signed by Justice Minister Mariano Cúneo Libarona, dissolving the unit. The decree stated the UTI had “completed its assigned task” by passing evidence to the Public Prosecutor’s Office. No public findings have been disclosed to date.

Timing Fuels Suspicion Amid Ongoing Legal Action

The move comes at a politically sensitive time. Judge María Romilda Servini is leading a separate judicial investigation into whether Milei or close associates were complicit in financial fraud. The Central Bank has also been ordered to release information regarding financial operations involving both Milei and his sister, Chief-of-Staff Karina Milei.

In the U.S., at least one class-action lawsuit has been filed against Milei, accusing him of deceptive promotion and negligence, arguing that investor trust was largely driven by his public backing of the token.

Watchdogs Stay Silent as Pressure Mounts

Despite the unit’s shutdown, various agencies—such as the Anti-Corruption Office, the Central Bank, the Financial Intelligence Unit, and the National Securities Commission—remain under pressure to continue their probes. Media outlets report that no conclusive information has emerged from these bodies, and their silence is stoking public distrust.

The UTI was led by María Florencia Zicavo, a senior Justice Ministry official known to be closely aligned with Minister Libarona. Her appointment, and now the unit’s dissolution, has only added to suspicions that the government is attempting to control the narrative and limit political damage.

Crypto Market Confidence Wavers

Argentina’s $LIBRA fiasco is the latest in a string of crypto controversies affecting Latin American markets. As adoption surges in the region, questions about investor protection and government accountability have grown louder.

Milei, who rose to power on promises of economic liberalization and financial innovation, may now face one of his most serious political crises yet—ironically triggered by the very sector he sought to champion.

Investors and lawmakers alike are calling for transparency, and as scrutiny intensifies, the shutdown of the $LIBRA probe may only mark the beginning of a broader political and legal storm.

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