Argentina’s Stock Market Plummets Due to Presidential Fraud Charges

Argentina’s stock market experienced a drastic decline after President Javier Milei faced fraud allegations for endorsing a meme coin.

Market Reaction

• The S&P Merval index dropped over 5% at market opening in Buenos Aires on Monday.
• As of now, it has slightly rebounded but remains 3% lower than its closing value on Friday.

The LIBRA Token Incident

• President Milei directed his followers on X (formerly Twitter) to invest in a Solana-based token called LIBRA, claiming it would bolster the Argentine economy.
• A now-deleted tweet announced that LIBRA aimed to support small businesses and startups in Argentina, with a link to purchase the token.
• LIBRA’s value skyrocketed to over $4 billion, only to crash by nearly 90% shortly after its launch.

Allegations of a Rug Pull

• Blockchain analysis indicated that a few wallets held the majority of LIBRA tokens, reminiscent of a rug pull scenario.
• In the crypto sphere, a rug pull happens when developers solicit funds for a project but then abandon it, pocketing the investors’ money.

Advisor’s Admission

• Kelsier Ventures CEO Hayden Davis, an advisor for the LIBRA project, revealed in an interview that he withdrew approximately $100 million from the LIBRA liquidity pool.
• Davis states he does not intend to profit from these funds and is awaiting instructions from Milei and the government.

Government Response

• The president’s office has initiated an investigation and denied any prior knowledge of the LIBRA project.
• In light of the events, fraud charges have been filed against Milei, with expectations of judicial action as soon as Monday.