Blow for Milei as Argentina’s lower house approves probe into $LIBRA crypto scandal

Lower house lawmakers dealt President Javier Milei a new blow on Tuesday, backing the creation of a commission of inquiry to investigate potential wrongdoing in the launch of the ‘$LIBRA’ cryptocurrency.

Deputies voted 128 to 93 in favour, with seven abstentions, reigniting a proposal which had failed to gain support in the Senate previously. 

An inquiry will now be launched into the currency, which moved more than US$4.5 billion and caused investors to lose approximately US$250 million.

Milei hailed the $LIBRA memecoin as a "private project" aimed at "stimulating the growth of the Argentine economy, by financing small businesses and Argentine entrepreneurs."

"The world wants to invest in Argentina. $LIBRA," he wrote on the X social network on February 14, in a post he deleted hours later after the currency crashed.

Industry experts have called the operation a "rug pull" – a scam where developers unveil a crypto token, attract investors, then quickly cash out.

$LIBRA went from boom to bust all in the space of an evening. After Milei’s apparent thumbs-up, it soared in value but then plummeted 90 percent within two hours. 

The President later claimed he "did not know the details of the project."

In an article, Forbes magazine has since called the scandal the "largest-ever crypto theft.”

Alongside the formation of the investigative body, opposition lawmakers also secured approval to summon key government officials to testify over the ‘Cryptogate’ affair and give explanations to the lower house.

These include Justice Minister Mariano Cúneo Libarona, Economy Minister Luis Caputo, Cabinet Chief Guillermo Francos and Roberto Silva, head of the National Securities Commission.

Milei and his sister, Presidential Chief-of-Staff Karina Milei, will not be questioned.

The motion to question the officials received 131 votes in favour and 96 against, while a third vote requesting formal information from the Executive Branch on the crypto affair passed with 135 in favour, 84 opposed and seven abstentions.

“We are going to determine the political responsibilities of government officials,” declared left-wing deputy Esteban Paulón in a post on social media after the vote.

A judge has been tasked with investigating Milei's connection to $LIBRA amid allegations that he was complicit in fraud, consorted with criminals or was in breach of his duties.

The scandal has also prompted allegations of fraud in courts in the United States.

Milei’s government had attempted to derail Tuesday’s session but a last-minute shift in the stance of legislators aligned with provincial governors enabled quorum — despite earlier signs the numbers wouldn’t hold.

The opposition Unión por la Patria coalition led the push, backed by dissident Radicals from Democracia para Siempre, Encuentro Federal, the Coalición Cívica and left-wing deputies. Unexpectedly, lawmakers aligned with Córdoba Province Governor Martín Llaryora and Catamarca’s Raúl Jalil also joined.

In contrast, PRO and most of the Unión Cívica Radical (UCR) supported the government’s failed bid to block the session, alongside La Libertad Avanza and Innovación Federal.

Lower House Speaker Martín Menem had sought to ease tensions by announcing that Francos would deliver his management report to Congress on April 16 — an appearance now likely to be dominated by questions over $LIBRA.

– TIMES/NA/AFP