Crypto scandal surrounding $Libra: Argentina's president must face parliament

Argentina's parliament is investigating the scandal surrounding the cryptocurrency $Libra. On Tuesday, Congress decided to set up a committee of inquiry. The memecoin was promoted by President Javier Milei shortly before millions were lost. High-ranking government representatives are to testify before Congress on the matter.

There were 128 votes in favor, 93 against and seven abstentions for Tuesday's decision. The government initially failed in its attempt to prevent the meeting and later to undermine support for the initiative. The resolution was finally adopted with the votes of opposition MPs from the Peronist, left-wing and centrist blocs. "In parliament, we will determine the political responsibilities of civil servants," wrote opposition MP Esteban Paulón from the social democratic Partido Socialista party in an online post after the vote.

Next setback for the government

According to the daily La Nación, the task of the committee, which will be constituted on April 23, is "to investigate the sequence of events related to the promotion and distribution of the cryptocurrency $Libra and to determine the degree of involvement and political responsibility of President Javier Milei, his sister and Secretary General of the Presidency, Karina Milei, the Spokesperson of the Presidency, Manuel Adorni, and the Minister of Economy, Luis Caputo, as well as all ministers and public officials involved in the case."

The appointment of the committee of inquiry is the second setback for the government within a week. Last Thursday, the Senate rejected two Supreme Court judges that Milei had nominated and then appointed by decree.

Parliament has also decided to summon the Minister of Economy, the Minister of Justice, the Head of Cabinet and the Head of the National Securities Commission, which is responsible for controlling the capital markets, to testify in connection with the crypto scandal. The $Libra case is already being investigated by courts in Argentina and the United States.

Crypto scandal with losses in the millions

Almost two months after the crypto fraud scandal, President Milei is therefore coming under increasing pressure in the matter. In mid-February, he promoted the cryptocurrency to his online followers just a few minutes after creating the memecoin $Libra. "This private project aims to boost the growth of the Argentine economy and finance small businesses and Argentine companies," he wrote, sharing a link to a purchase option. An estimated 40,000 people actually bought $Libra. The memecoin quickly gained in value, but then collapsed within a few hours. The vast majority of investors suffered losses totaling several hundred million US dollars. Milei then deleted his original post and explained that he was "unaware" of the details of the project. He rejected the criticism of his advertising campaign in his usual sharp manner.

The events surrounding the $Libra are reminiscent of a so-called "rug pull". This refers to a type of fraud in which money placed on a cryptocurrency by speculators is taken and used to make off with it. In Argentina, voices were also raised suggesting that the president may have broken the law with his advertising, as it is illegal for elected officials to advertise private companies. It also emerged that the president and the officials surrounding him had met with the businessmen behind $Libra before the launch of the cryptocurrency.

There were calls from the opposition for his impeachment. The scandal has also led to accusations of fraud in the United States. In February, the Argentinian opposition failed in the Senate in its attempt to set up a committee to investigate the case. Now it has succeeded in Congress, which is also due to a change in the balance of power in parliament: Former right-wing conservative President Mauricio Macri, who helped Milei to power, no longer supports him unconditionally.

Read also

Missing Link: Die Blockchain-Illusion – Chris Dixons Web3-Vision hinterfragt

(ds)