- Argentina’s memecoin crisis kicked off with a tweet from president Javier Milei.
- His post saw the LIBRA token’s market value skyrocket to $4.5 billion.
- The token crashed within hours, leaving scandal and outrage in its wake.
A memecoin crash has rocked the crypto community and risks dragging down Argentina’s President Javier Milei with it.
The so-called “cryptogate” has already triggered a federal investigation in the country.
“On-chain sleuths pinned the instant dump on insiders cashing out almost $100 million,” Alex Thorn, head of firmwide research at digital assets company Galaxy, wrote in a research note. “In the wake of the apparent insider ‘rug pull,’ the fallout has led to calls for impeachment of Milei and involved key opinion leaders.”
Here’s how it happened.
All times are local.
Friday
7.00pm: LIBRA launches on Meteora, a Solana-based decentralised exchange, according to the Galaxy Research note. LIBRA shouldn’t be confused with the failed Meta-touted stablecoin project with the same name.
7.01pm: Milei tweets about a Solana contract address for LIBRA, according to the Galaxy Research note.
The president says the memecoin is linked to a project that would “focus on encouraging the growth of the Argentine economy, funding small businesses, and Argentina ventures.”
The next hour is a whirlwind. More than 44,000 wallet addresses buy in, pushing the token’s market value to $4.5 billion.
10:45pm: A massive wave of sell-offs tanks the price more than 97%, according to the Galaxy Research note.
Saturday
12:35am: Milei deletes the promotional tweet, claiming ignorance of the project’s underpinnings.
“I wasn’t aware of the project’s details, and after I was made aware, I decided to stop sharing it (which is why I deleted the tweet),” writes Milei.
He ends the post with a stab at the political opposition — calls them “filthy rats of the caste.”
3:18am: Julian Peh, CEO of Singapore-based KIP Protocol, posts on X.
“The funds are still onchain and not a single SOL will be moved,” Peh writes. “Yes KIP is involved in the project, but our primary role is to help run the fund allocation to the Argentinian companies, and less on the token side.”
10:30am: A livestream involving two Solana influencers goes viral.
Memecoin promoter Michael Jerome, who goes by threadguy, takes a call from fellow memecoin influencer Richard Bengston, also known as Faze Banks.
During the call, Banks says he’s “really really early” to LIBRA. Threadguy then mutes the microphone, covers his mouth, and appears to talk to Banks for some 20 seconds.
3:11pm: Arkham Intelligence signals that only a handful of addresses hold the vast majority of LIBRA-related funds.
7:00pm: Hayden Davis, a little-known adviser to Milei, and CEO of Kelsier Ventures, posts a three-minute video claiming part responsibility for setting up the LIBRA launch.
“There were only certain elements that I could control,” he says, adding that “definitely things didn’t go according to plan.”
Davis claims to have recollected all the money raised through fees, farming or liquidations, and his intention is to “inject everything back into the LIBRA chart.”
9:52pm: Blockchain investigators from Bubblemaps indicate there were signs of insider trading. DL News did not independently verify the data or the claims.
10:34pm: The Office of the President of Argentina acknowledges meetings with key players like Davis, and KIP Protocol involved in the LIBRA launch. Milei says he’s ordered the Anti-Corruption Office to investigate the scandal. The Anti-Corruption Office operates underneath the executive branch.
According to the statement, KIP Protocol was in charge of developing the project behind the LIBRA token, and representatives of the company said that Davis would be in charge of providing the infrastructure for the project.
Sunday
10:00am: “Argentinian opposition threatens Milei impeachment over LIBRA promotion,” Galaxy Research notes.
1:36pm: A group of 12 Argentine opposition lawmakers establish a committee to investigate Milei, threatening to impeach the president, one of the lawyers told The Associated Press.
9:36pm: Barstool CEO Dave Portnoy posts screenshots that he claims show that Davies gave him a large amount of LIBRA tokens. Portnoy says he’s been “paid back” by Davis.
These screenshots haven’t been independently verified by DL News.
Portnoy also says he bought into the launch 10 minutes after Milei tweeted.
Davies “fully led me to believe he was in lockstep with Milei and I think he thought he was. I did a ton of research on Milei and was impressed with him,” Portnoy says.
“I would have never been involved without Hayden vouching for him. And if I vouch for a guy and hyped up a cool project that turned out to be a fraud I’d pay them back too regardless of whose fault it was.”
Monday
2:01am: Blockchain detective Stephen Findeison, better known as Coffeezilla, publishes an interview with Davis.
In it, Davis talks about rampant insider trading in the memecoin sector — “that’s how [key opinion leaders] main money gets made,” he said — his involvement in the MELANIA memecoin launch, and how he is holding $100 million until he figures out the best way to distribute the funds.
“If I’m being extremely transparent, that’s [the $100 million] also my leverage with certain groups and parties,” Davis said.
Davis says that his team bought up the LIBRA and MELANIA tokens immediately after launching them, a move known in crypto circles as sniping, or frontrunning.
“When we’re sniping, we’re attempting to avoid other snipers getting in,” Davis said.
“A lot of times it’s to protect — and if there’s enough volume — to take some off so people can have a chance to pump the chart back up."
6.22am: KIP Protocol tweets a response to Milei’s statement. The company says it has “several material factual inaccuracies which we wish to correct to ensure that the facts are properly reflected in the public record.”
It denies having had any direct involvement in the project, saying it “did not initiate the project, did not manage or direct the token launch process, and did not receive any tokens pre or post-launch.”
The company also rejected the description of LIBRA as a “KIP Protocol project.”
9:00am: Argentina’s stock market opens to a 6% drop, and a federal judge is assigned to investigate Milei, Reuters reports.
10:00am: Portnoy interviews Davis on his livestream. Davis struggles to respond to questions such as who the $100 million belong to.
12:30pm: Milei retweets a guide on how to purchase LIBRA tokens. The price nearly doubles in minutes. He later deletes the tweet, Galaxy Research notes.
8:00pm: Local broadcaster TN publishes an interview with president Milei and local journalist Jonathan Viale.
Milei denies any wrongdoing, claiming he “didn’t promote it, just shared it.”
He also pushes back against the 44,000 wallet addresses that purchased LIBRA coins.
“There were no more than 5,000 actual investors,” said Milei. “Did the State lose money? No. Did Argentineans lose money? No. The vast majority of investors were American and Chinese.”
Tuesday
3:53pm: DL News publishes a story about how influential crypto players say that the Milei scandal was one step too far and that they are now fed up with memecoins.
“Memecoins have undoubtedly damaged the industry’s reputation,” Jill Gunter, the co-founder of Espresso Systems, a cross-chain network, told DL News.
“I was more comfortable explaining the Silk Road to my parents when I started getting interested in crypto in 2014 than I am explaining memecoins,” added Gunter, who has consulted the International Monetary Fund and the World Bank on crypto initiatives.
5:35pm: CoinDesk breaks a story about messages seemingly written by Davis in which he brags that he “controls” Milei through the president’s sister, Karina. DL News has not independently verified the authenticity of these messages.
“I send $$ to his sister and he signs whatever I say and does what I want,” read messages posted by local news outlet La Nación.
9:00pm: CoinDesk updates its story with a denial from Davies’ spokesperson who said Davis does not recall sending such a message, and has no record on his phone of sending it.
The statement continued as follows: “Recent media reports claiming I paid President Javier Milei or his sister, Karina Milei, to launch the Libra memecoin are completely false. I never made any payments to them, nor did they request any. Their only concern was ensuring proceeds from Libra would benefit Argentina’s people and economy.”
Wednesday
3:03pm: La Nación reports that more than 200 investors from Argentina, Asia, Europe, and the United States, are preparing for a potential class-action lawsuit against the people and organisations involved in the LIBRA scandal.
“We are currently investigating and understanding what happened to pursue possible legal options for our clients,” said the firm’s managing partner, Max Burwick.
It won’t be easy, however.
“We need to examine under what legal rules and in which jurisdiction the cryptoasset in question [alluding to $LIBRA] was issued, where it was offered, from where it was purchased and whether there are any affected U.S. investors,” said Martin Litwak, an Argentine lawyer residing in the US.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.