Argentina’s stock market dropped after President Javier Milei faced fraud charges for promoting a meme coin, LIBRA, which crashed nearly 90% after surging to $4 billion.
Yahoo data shows that the S&P Merval index fell more than 5% when the market opened in Buenos Aires. It has gone up a little since then, but it is still down 3% from Friday’s close.
The market chaos started with Milei’s now-deleted post on X (formerly Twitter), in which he told his fans to follow LIBRA, a Solana-based token. He said that the project would “boost the growth of the Argentine economy by giving money to new and small businesses in Argentina.” Investors could buy the token on a website that was tied to his post.
LIBRA’s value went through the roof and reached over $4 billion before dropping by almost 90% in just a few hours.
Companies that study blockchains noticed that a small group of wallets held most of the LIBRA stock, which fits with the idea of a rug pull. When crypto coders raise money for a project but then give up on it and cash out investors’ money, this is called a “rug pull.”
In an interview with YouTuber CoffeeZilla, Hayden Davis, CEO of Kelsier Ventures and Milei’s LIBRA advisor, said that he took out about $100 million from the token’s liquidity pool and now owns the money.
In contrast, Davis said he has no plans to make any money off of the money and is waiting for instructions from Milei and the Argentine government before deciding how to spend it.
The president’s office has since ordered a probe and said they didn’t know about LIBRA ahead of time. At the same time, lawyers in Argentina have charged Milei with theft. According to the Associated Press, a judge could rule as soon as Monday.
