🌎 LIBRA: From market collapse to political fallout

How a tweet from Milei fueled a $4.5 billion frenzy and sparked political turmoil

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Frontera EC & Joker
February 21, 2025

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🇦🇷 Milei’s tweet and the $4.5B frenzy

On February 14, Argentine President Javier Milei posted a tweet promoting LIBRA, a token tied to Viva La Libertad Project, a supposed initiative aimed at funding small business and local projects in Argentina. The project positioned itself as a tool for economic growth, though its structure and legitimacy were unclear.

Milei's endorsement sent LIBRA's market cap soaring to $4.5 billion in a matter of minutes, as investors saw his post as a sign of credibility. But behind the scenes, insiders were already cashing out.

The token's sudden rise was short-lived. Within hours, it collapsed 96%, wiping out billions. Panic spread, and Milei quickly deleted his tweet, denied any involvement, and attempted to distance himself from the fallout.

But the damage was done, and questions about insider trading and political responsibility began to surface.

🎢 Behind the pump: Insider cashout

While investors rushed in, insiders were already securing their exit. Onchain data revealed that eight wallets related to the LIBRA deployers cashed out $107 million, draining liquidity before the inevitable crash.

A closer analysis shows that 82% of the total token supply was concentrated in a single cluster of wallets on launch, giving insiders and the team unchecked control over the market. No official tokenomics were ever disclosed, meaning investors had no visibility into supply distribution or insider allocations. This created the perfect setup for a rapid selloff, as massive holdings were already primed to be dumped onto the open market.

Part of this selloff happened through one-sided liquidity strategies in Meteora pools. Developers injected only LIBRA into liquidity pools while systematically removing USDC and SOL, ensuring that buy pressure flowed directly into their wallets instead of circulating fairly within the market.

The rest came from insider wallets that had been set up hours before launch. Eleven wallets, funded in advance, accumulated LIBRA early and dumped it at peak valuation, netting a combined $43.8 million before the collapse.

But that was just one example of the insider cashout. Another case revealed that the LIBRA team used three wallets to snipe their own tokens, making a $6.65 million profit.

Multiple insider wallets front-ran the market, signaling that many more had advance knowledge of the launch and positioned themselves to profit at the expense of retail investors.

As liquidity drained and panic spread, LIBRA plummeted 90% in minutes, wiping out billions in market cap. The wave of sell orders sent shockwaves through the market, forcing Milei to delete his tweet and backpedal on his promotion.

⚠️ Milei’s backpedal and damage control

As outage over LIBRA spread, President Javier Milei moved quickly to minimize his connection to the token. Shortly after the crash, he deleted his tweet and issued a statement insisting that he had no financial ties to the project.

Milei claimed that he had simply shared information about a private initiative, as he often does with business ventures that align with his pro-market stance. He admitted he wasn't fully aware of the details and, after learning more, decided to remove his post to avoid further speculation

However, official records revealed that Milei had previously met with representatives of KIP Protocol and with Hayden Davis from Kelsier Ventures, raising questions about how much he knew before promoting it.

Under mounting pressure, the Argentine government announced the creation of a special investigative unit to analyze the circumstances surrounding LIBRA’s launch. The investigation was framed as an effort to ensure transparency, but many could argue it was a damage control maneuver rather than a genuine attempt to hold anyone accountable.

👤 Who was really behind LIBRA?

KIP Protocol, an AI-driven Web3 payments firm, was initially tied to the Viva La Libertad initiative, but its CEO, Julian Peh, quickly distanced the company from LIBRA. Peh claimed that his company was only contracted to assist in distributing project funds to local businesses and had no role in creating or managing the token. 

However, KIP representatives did meet with Argentine officials months before the launch, and Peh was informed about the project days before Milei’s tweet. Despite his denials, KIP was still positioned as a key entity in the project’s broader financial strategy.

Meanwhile, Hayden Davis, the founder of Kelsier Ventures, was the primary architect behind LIBRA’s token launch and technical execution. 

Unlike Peh, Davis has openly acknowledged his involvement, admitting that his team sniped the tokens at launch, acquiring millions before selling into retail demand. He defended the move, saying it was a common industry practice, which is not, downplaying accusations of insider trading, market manipulation, and misappropriation of funds.

Davis now controls the $107 million extracted by the team and, in a post-collapse interview with Coffeezilla outlined three possible paths for the funds:

  • Donating the funds to an Argentine charity.

  • Refunding traders who lost money.

  • Injecting liquidity back into the token chart.

Beyond handling the token launch, Davis also claimed to “control” President Milei and suggested that he had paid bribes in Argentina.

Tech Forum Argentina, led by Mauricio Novelli and Manuel Godoy, was also deeply involved in the LIBRA rollout. 

They admitted that the team behind LIBRA hired them for technical and commercial advisory, meaning they were paid to help facilitate the project’s launch and secure key political connections, including Milei’s endorsement.

đź’Ł Contagion and political fallout 

The LIBRA scandal quickly escalated from a market collapse to a full-blown political and legal crisis. 

Shortly after the token’s implosion, Argentine lawyers filed charges against President Javier Milei, accusing him of fraud and market manipulation for his promotion of the token. The legal complaints argue that his endorsement directly influenced LIBRA’s meteoric rise, and they demand accountability for the financial losses suffered by retail investors.

The political consequences could be just as severe. Milei now faces calls for impeachment, with opposition leaders seizing on the scandal as evidence of reckless governance and potential misconduct. While the impeachment process would be a steep challenge, the controversy has already tarnished his credibility and raised doubts about his administration’s handling of economic and financial matters.

However, LIBRA’s impact didn’t stop at Milei. The fallout rippled through the Solana ecosystem, pulling in some of its biggest DeFi players. 

Meteora, a major Solana liquidity provider, was accused of facilitating insider trading within LIBRA and other tokens including $MELANIA and those in the M3M3 platform. Onchain evidence suggested that Kelsier Ventures had worked with Meteora to manipulate liquidity pools, extracting millions from retail investors. The controversy forced Ben Chow, Meteora’s co-founder, to step down, as allegations of misconduct and mismanagement surfaced.

Regardless of the legal outcome, LIBRA has become a defining moment at the crossroads of crypto and politics, exposing the risks of unchecked speculation and the urgent need for accountability. 

But this scandal does not define the future of crypto in Argentina. For years, builders, entrepreneurs, and innovators have worked to create real solutions, generate employment, and establish Argentina as a global leader in blockchain technology. 

While LIBRA is a setback, the country’s crypto community remains committed to transparency and sustainable growth. This moment serves as a reminder of the importance of education, clear regulations, and ethical development, ensuring that the true potential of crypto is realized, not through shortcuts or speculation, but through innovation and real-world impact.

đź“° Latam Crypto News đź“°

Key crypto stories in LATAM this week

Odisea and Mantle launch NĂşcleo, a 10-week intensive program designed to help Latin American developers transition from Web2 to Web3.

With one of the highest crypto adoption rates in the world, Latam is at a turning point; this program will give devs the skills to build smart contracts, dApps, and leverage AI while connecting them with real opportunities in the blockchain ecosystem. Applications close on March 3rd, the program starts on the 17th.

🇧🇷 Brazil

Starting March 2025, Brazil’s Federal Revenue Service will launch the Declaration of Crypto Assets (DeCripto), requiring individuals and companies to report crypto transactions directly. The goal is to increase transparency, combat tax evasion, and align regulations with the growing digital asset market.

Brazil has issued over 20 million National Identity Cards (CINs) using blockchain technology, enhancing security and reducing fraud. This initiative aims to modernize citizen identification nationwide. 

🇧🇷 Crypto inflows surge in Brazil

Brazil saw $15.7 million in inflows into digital asset investment products in the first weeks of February, signaling growing investor confidence in crypto despite market volatility and regulatory scrutiny.

Congresswoman Júlia Zanatta has launched a campaign against Brazil’s Drex CBDC, citing privacy concerns and government overreach. She is calling for legislative action to block its rollout.

Brazil’s Smart Summit 2025 kicked off with a strong focus on tokenization, highlighting its role in transforming finance, real estate, and supply chains in the country’s digital economy.

🇦🇷 Argentina

Argentina leads crypto adoption in Latin America, with 4 out of 10 new crypto app users coming from the country. It ranks #1 in active users and crypto volume received, making up 22% of total inflows and 39% of active mobile sessions—despite representing just 7.3% of the region’s population.

SEED Latam and Crecimiento are offering five scholarships of up to $500 USD for LATAM builders to attend Aleph March ’25 in Buenos Aires. This month-long Pop-Up City event will bring together 1,500+ innovators to grow Argentina’s crypto and startup ecosystem. Apply now!

🇸🇻 El Salvador

President Nayib Bukele met with Michael Saylor to discuss how El Salvador can benefit from and accelerate global Bitcoin adoption, reinforcing the country’s commitment to BTC as a key asset.

El Salvador modified its Bitcoin Law to comply with an IMF deal, redefining BTC as “voluntary legal tender” while restricting its use for taxes and government payments.

🇬🇹 Guatemala

Guatemala’s Interoceanic Corridor adopts tokenization to attract investors, leveraging blockchain for transparency, efficiency, and security in one of its largest infrastructure projects, aiming to boost economic growth and global trade.