Why Argentina’s President is in a soup over a crypto meme coin promotion

The coin, developed by KIP Protocol and Hayden Davis, could be obtained by accessing a link that directed users to a website called vivalalibertadproject.com, referring to the well-known phrase with which Milei closes speeches and messages on his social media.

Milei, who claims to have no connection with the coin or its promoters, joins the list of world leaders like Donald Trump to get associated with promoting meme coins.

Meme coins are highly volatile cryptocurrency inspired by popular internet or cultural trends. They carry no intrinsic value but can soar, or plummet, in price. They are generally seen as indicators of retail investors’ interest in cryptocurrency. It is usually a marker of investors’ risk appetite at any given point in time.

The implosion of Libra and its aftermath

As per industry analysis, the Libra meme coin hit a peak market cap of $4.5 billion, but within three hours of launch, insiders who may have promoted the coin are believed to have cashed out more than $87 million. A few hours later, Libra erased more than $4.4 billion in value, effectively pulling the rug from under unsuspecting retail investors.

The rapid implosion led Milei to clear himself of any association with the project.

“A few hours ago I posted a tweet, as I have so many other times, supporting a supposed private enterprise with which I obviously have no connection whatsoever,” Milei wrote on X. “I was not aware of the details of the project and after having become aware of it I decided not to continue spreading the word (that is why I deleted the tweet).”

Lawyers in Argentina have filed fraud complaints against Milei for his involvement in promoting the Libra meme coin, the Associated Press reported. Jonatan Baldiviezo, a lawyer and one of the plaintiffs, told the AP that they saw an illicit association to commit “an indeterminate number of frauds” in the episode. “Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” he said.

Crypto on the move

Since the victory of Trump in the United States Presidential elections, the crypto market has picked up, responding to signals that Trump could go easy on the virtual currency.

It was also anticipated that Trump having Elon Musk — who has long been an advocate for cryptocurrency — as a key adviser could further bolster investors’ belief in bitcoin and other digital virtual assets, even if concerns around conflict of interest remain.

Trump’s pick to lead the Securities and Exchange Commission (SEC), Paul Atkins, is widely considered a cryptocurrency advocate.

Earlier this year, crypto markets were rocked by the launch of two new his and her ‘meme coins’, by Trump and his wife Melania. While this was seen as the administration’s signal towards a favourable regulatory environment for cryptocurrencies, it also raised ethical concerns.