Argentina’s Chamber of Deputies has initiated a formal inquiry into the LIBRA memecoin scandal following the token’s downfall, which resulted in a loss of over $280 million for nearly 75,000 investors.
During a special session on April 8, legislators approved three resolutions designed to investigate the circumstances surrounding the controversial token’s launch and swift decline. The first resolution sets up a commission specifically tasked with probing the LIBRA scandal, which gained 128 votes in support.
The lawmakers also voted to summon key government officials, including chief of staff Guillermo Francos, economy minister Luis Caputo, justice minister Mariano Cúneo Libarona, and the head of the National Securities Commission, Roberto Silva, for questioning.
The third resolution calls for comprehensive reports from the executive branch regarding the development of LIBRA and the government’s involvement in its promotion. All three proposals passed with robust backing, despite some opposition from members of the ruling La Libertad Avanza party.
The opposition demanded transparency and accountability, with lawmaker Maximiliano Ferraro from the Civic Coalition asserting, “Society has the right to know the truth.” Others cautioned against executive overreach, emphasizing the importance of respecting judicial processes.
The LIBRA scandal began on February 14 when President Javier Milei endorsed LIBRA on X, stating it would “boost the Argentine economy.” The token initially skyrocketed over 3,000% before plummeting 90% just hours later, after Milei deleted the post and claimed ignorance about the token’s specifics. His administration later characterized the promotion as standard support for entrepreneurship.
Investigations have since suggested that insiders, like Kelsier Ventures, may have obtained tokens and manipulated liquidity prior to launch, reaping over $110 million in profits. A series of lawsuits have been filed against pivotal figures involved in the token’s creation.
One such lawsuit, filed on March 18 by Burwick Law in New York, is a class-action suit against Kelsier Ventures, KIP Protocol, and Meteora, alleging deceptive practices, liquidity manipulation, and fraud. Court filings indicate that developers withheld 85% of the token’s supply, allowing insiders to drain liquidity at launch while misleading retail investors with promises of economic revival.
The fallout from the scandal has sparked a political backlash. Lawmakers from various opposition groups contend that President Milei’s management of the situation undermines his anti-corruption message, potentially damaging his credibility as Argentina approaches its midterm elections later this year.