Argentina is ramping up its regulatory efforts against the Libra Memecoin scandal, as authorities seek to freeze $110 million linked to the project. The move comes after a dramatic 90% price crash in LIBRA, which left investors reeling with $250 million in losses. This case could set a legal precedent for crypto regulations in Argentina, marking a major crackdown on memecoins suspected of insider manipulation.
From Hype to Collapse: The LIBRA Memecoin Scandal
The controversy began when LIBRA, a Solana-based memecoin, surged to a staggering $4.5 billion market cap after being promoted on social media by Argentine President Javier Milei. However, the hype quickly turned into disaster when Milei deleted his post and distanced himself from the project, triggering a massive sell-off. The token’s price collapsed, leaving retail investors with heavy losses.
Now, federal prosecutor Eduardo Taiano has initiated an investigation, focusing on whether LIBRA’s price surge was an orchestrated pump-and-dump scheme. Authorities are reportedly reviewing Milei’s deleted social media posts, phone records, and visitor logs from the presidential office to determine the extent of his involvement.
Key Figures Under Scrutiny
One of the central figures in the scandal is Hayden Davis, CEO of Kelsier Ventures, who admitted to holding $110 million from LIBRA’s launch. Davis initially claimed to have ties to Milei’s advisory team but later attempted to distance himself from the fallout. His $100 million in stablecoins and $13 million in liquidity provider (LP) fees are now the subject of intense legal scrutiny.
Despite growing concerns over insider trading and potential market manipulation, neither Milei, Davis, nor any affiliated entities have faced legal charges so far. Meanwhile, the scandal has negatively impacted the broader Solana ecosystem, with memecoins seeing a 94% drop in liquidity and SOL’s price falling from $180 to $150.
Market Implications: What Comes Next?
With Argentina tightening its grip on crypto regulation, this case could set a new standard for how governments handle memecoin-related fraud. The uncertainty surrounding the legal proceedings and potential investor lawsuits could lead to continued volatility in Solana-based assets.
For traders, the scandal highlights the risks of memecoin speculation, reinforcing the importance of fundamental analysis over hype-driven investments. Solana’s short-term outlook remains uncertain, but a recovery could be possible if the market regains confidence.
⚠️ This article does not constitute financial advice. Always conduct your own research before making investment decisions.
