Argentine prosecutors will investigate President Javier Milei for promoting a cryptocurrency that crashed, losing investors billions of dollars and prompting a flood of complaints.

The federal prosecutor’s office will examine whether Milei engaged in fraud or criminal association or was in breach of his duties when he last week praised the $Libra cryptocurrency on social media, news reports said.

The currency’s value soared then crashed, and Milei deleted his blessing hours later, saying he had made a mistake.

Argentine economists, crypto specialists and opposition political figures criticised the self-declared “anarcho-capitalist” President, an economist by training, and said the digital asset could be a fraud or a Ponzi scheme.

Industry observers said the operation was likely a “rug pull” — a scam where developers unveil a crypto token, attract investors, then quickly cash out.

One of several complainants alleges Milei formed part of a “criminal organisation that organised a fraud with the $Libra cryptocurrency that simultaneously affected more than 40,000 people with losses of more than US$4 billion ($6.99b).”

The Kobeissi Letter, a publication that provides analysis on global capital markets, said on X that within minutes of its launch, “multiple large holders began liquidating millions of US dollars worth of $Libra.”

“This included gains of +US$4 million or more as $Libra rose to US$4.6 billion in market (capitalisation),” it reported.

Milei later said he did not know “the details of the project and after learning about it, I decided not to continue promoting it”.

He added he had “obviously no connection” with the “alleged private company”.

Nevertheless, former President and opposition figure Cristina Kirchner called Milei a “crypto-scammer” and opposition parliamentarians announced they would institute impeachment proceedings against him.

Other parties are seeking the creation of a special parliamentary commission to question Milei.

Improper conduct?

The Buenos Aires Stock Exchange closed 5.58% down yesterday from Friday’s closing levels, with drops of up to 8% for some stocks.

The presidency on Saturday announced Argentina’s Anti-Corruption Office would be tasked with determining whether any improper conduct occurred.

It would also create a task force to carry out an “urgent investigation into the launch of the cryptocurrency $Libra, and all companies or individuals involved.”

The prosecutor’s office will also look into Julian Peh — the chief executive of companies that participated in the creation of $Libra — and Chamber of Deputies President Martin Menem, who had reposted Milei’s original endorsement.

Political scientist Carlos Germano said the case “affects his (Milei’s) credibility” though his efforts to combat inflation, at its lowest in four years, remain popular with the electorate.

Milei continued with his duties this week, hosting Republican US Senator Steve Daines in Buenos Aires. The president is due to visit the United States later this week.

© Agence France-Presse