Jesús Daniel Romero and William Acosta for Poder & Dinero and FinGurú
Judicial Context
The judicial situation of Argentine President Javier Milei has intensified following accusations related to the cryptocurrency $Libra. The accusations include crimes of fraud, influence peddling, and conflicts of interest, all linked to the promotion of the $Libra token, which quickly collapsed, causing significant losses to thousands of investors. This scandal not only jeopardizes Milei's administration but also raises serious questions about ethics in politics and the regulation of the emerging cryptocurrency market.
Formal Charges
Formal charges were presented by federal prosecutor Eduardo Taiano, who has indicated possible crimes of abuse of authority, fraud, and others related to the promotion of the token. A key date was January 14, when Argentine President Javier Milei posted on his X account, generating a dramatic increase in the token's value, which reached nearly $5 before plummeting to near-zero values.
Involved Parties
Javier Milei, as president, is accused of having used his influence to promote $Libra, leading many investors to lose money. Hayden Mark Davis, creator of $Libra and representative of Kelsier Ventures, is implicated in the promotion and development of the token. Julián Peh, CEO of Kip Protocol, the company that developed the technological infrastructure behind $Libra, is also mentioned. Mauricio Novelli and Manuel Terrones Godoy, promoters of the Tech Forum event where the connection between Milei, Davis, and Peh was established, are other key players. Sergio Morales, an advisor on virtual assets at the National Securities Commission, is linked with the other involved parties.
Accusations and Complaints
The accusations include organized crime, fraud, influence peddling, bribery, breach of public official duties, and violations of the Public Ethics Law. The $Libra scheme is described as a "rug pull," where a few knowledgeable individuals bought the token before its massive promotion, profiting before its value collapsed.
Modus Operandi
The modus operandi in the case of the cryptocurrency $Libra can be described as follows:
Mass Promotion: Javier Milei, using his influence as president of Argentina, made a promotion on his X account on January 14. His message generated an immediate increase in interest and the token's value, which rose from cents to nearly $5 in a matter of minutes.
Rug Pull: After the promotion, the early holders of the token, who were already aware of the project, sold their positions before its value collapsed. This phenomenon, known as "rug pull," implies that developers or early investors withdraw their funds, leaving new investors with substantial losses.
Lack of Regulation: The cryptocurrency was neither registered nor supervised by Argentina's National Securities Commission (CNV), leaving investors without necessary protection and generating distrust in the project.
Concentrated Ownership Structure: It is mentioned that $Libra was created with five virtual wallets controlling 85% of the tokens in circulation, suggesting that most tokens were in the hands of a few, facilitating the collapse of their value.
Involved Companies
Kip Protocol: A technology infrastructure company founded by Julián Peh, mentioned as the developer of the $Libra token. Kip Protocol was responsible for the platform through which the token was launched.
Kelsier Ventures: Represented by Hayden Mark Davis, who is the creator of $Libra. The company is involved in the promotion and development of the token.
vivalalibertadproject.com: The website related to the $Libra project, which was used to promote the token.
Tech Forum: An event where connections were established between Milei, Hayden Mark Davis, and Julián Peh, suggesting a nexus between them in the promotion of the token.
National Securities Commission (CNV): Although not a company involved in the development of the token, its lack of regulation over $Libra is a critical point in the complaints, as the legality of the promotion and operation of the token is questioned.
Ongoing Legal Actions
The situation has led to ongoing legal actions, including lawsuits in the United States, where the law firm Burwick seeks to represent the affected parties in a potential class action. Additionally, the firm Moyano and Associates has submitted a report of criminal operations to the FBI and the Department of Justice. The Specialized Cybercrime Unit (UFECI) has been involved in preserving and recovering evidence related to the case, and reports from public and private organizations have been requested.
Additional Complaints
Several complaints have been filed in Argentina, including one from economist Claudio Lozano and members of the Observatory of the Right to the City, as well as other politicians like Agustín Rombolá and Victoria Donda. Requests have been made for the seizure of funds mentioned by Hayden Davis and the inclusion of Karina Milei as a defendant based on alleged conversations about payments.
Reactions and Strategies
In Milei's circle, it is claimed that there are no crimes that can be attributed to him and that they trust that the case will not progress. Judge María Servini has begun reviewing the complaints and summoning the complainants to affirm their accusations.
Status of Javier Milei's Case
Milei is not charged. According to Argentine criminal procedural code, when a prosecutor receives a complaint, he has two basic options: the first is to dismiss it for considering that the arguments do not warrant a judicial investigation or because the reported facts do not constitute crimes specified in the Argentine penal code. The second alternative is to take the complaint, analyze the reported facts, and establish what is called a procedural object. That is, which specific crimes will be investigated. It is important to remember that in criminal complaints, facts are investigated, not individuals. Therefore, the definition of the procedural object does not in any way turn the accused into a charged individual. Charges can only be made once the evidence requested and received by the prosecutor makes the accused a suspect of having participated in the commission of any of the crimes mentioned in the procedural object. This must be done by clearly identifying the individuals involved, providing a precise legal basis for why they are charged. So far, there is no such basis in the file overseen by federal prosecutor Eduardo Taiano. Therefore, the current status of President Javier Milei is merely that of being reported.
Disinformation Surrounding Milei's Charges
There continues to be an operation of disinformation regarding Javier Milei's procedural situation in the criminal case referred to as "Cryptogate." Juan Grabois posted on his X account about the case: "He who does them pays for them, charges for crypto-thief Milei for the crimes of fraud, influence peddling, and incompatible negotiations with public office."
We have already explained here that once a criminal complaint is received, the prosecutor must classify the facts to be investigated according to what is stipulated in the procedural code and technique. This is precisely what Eduardo Taiano has done.
Many people, unfamiliar with these issues, may be led to think that the inclusion of a person in a complaint, Milei in this case, directly turns them into a charged defendant when determining the procedural object, which is what Taiano has done so far. False. Charges must be made by name and surname, and with a clear foundation for them. None of this exists in the file. Therefore, we insist, the legal status of Milei is, at this moment, that of being reported.
Furthermore, another individual mentioned (and who, following the reasoning of those who wish to see Milei charged, should also be) is businessman Hayden Mark Davis, who has expressed his intention to be a plaintiff in the case, meaning, a third party affected. Can he do so if, as those operating against Milei assert, he were charged? Absolutely NOT.
So far, his status is identical to that of Milei: reported. Knowing that they are lying, they operate to confuse the public opinion, underestimating their readers and followers to gain political and personal advantage. "Lie, lie, for something will remain." Who said it? Historians still disagree, although most attribute the phrase to Adolf Hitler's chief of propaganda, Joseph Goebbels. The disinformation campaign by the serial accusers of Milei is a clear practical application of that perverse principle.
Chronology of "Cryptogate"
February 14, 2025
Milei promotes $LIBRA: President Javier Milei recommends the cryptocurrency $LIBRA on X, claiming it is designed to fund Argentine companies.
Peak and Collapse: In two hours, $LIBRA reaches its peak value before collapsing 89% in just four hours, affecting over 44,000 investors.
February 15, 2025
Milei disassociates: The president deletes his post and claims not to be connected with $LIBRA, deciding not to continue promoting the cryptocurrency.
Disassociation from KIP Protocol: KIP Protocol separates from the project and blames Kelsier Ventures and Hayden Davis for the launch.
Davis confirms his role: Hayden Davis admits to being an advisor to Milei and behind the launch of $LIBRA.
February 16, 2025
Impeachment: Lawmakers request impeachment proceedings against Milei for his possible involvement in "defrauding" related to $LIBRA.
Complaints in Court: Multiple complaints are filed in Federal Court.
Link with Novelli: A close relationship between Milei and Mauricio Novelli, a trader linked to the case, is revealed.
February 17, 2025
Defensive Interview: Milei defends himself in an interview with Jonatan Viale, where his advisor Santiago Caputo intervenes to mitigate legal issues.
February 18, 2025
Bribery Revelations: CoinDesk publishes chats where Davis mentions he could "control" Milei and his circle through bribes.
February 19, 2025
Civil Lawsuit in the U.S.: Burwick Law initiates a civil lawsuit in the United States on behalf of over 200 affected clients by $LIBRA.
February 20, 2025
Congression Block: The creation of an investigative commission in the Senate regarding "Cryptogate" is blocked, with a sudden change of stance by six radical senators. The rejection was by only one vote, and what is most telling is that the senator who cast it had previously expressed support for investigating Milei in the Congress's constitutional affairs commission.
Context and Consequences
The case has unleashed a significant political scandal, with growing complaints and intense debate in Congress. The situation complicates with revelations about prior meetings between Milei and those responsible for the project, leading to questioning the transparency and ethics of the president in promoting a cryptocurrency that proved detrimental to thousands of investors.
Conclusion
The case of $Libra is characterized by massive promotion that exploited Javier Milei's political influence, combined with a concentrated ownership structure that facilitated the collapse of the token's value. The companies involved, such as Kip Protocol and Kelsier Ventures, play a crucial role in the ongoing investigation both in Argentina and the United States. The resolution of this case could set an important precedent for the regulation of cryptocurrencies and ethical conduct in Argentine politics.
Credits
La Nación
Clarín
Página/12
Infobae
El Cronista
Ámbito Financiero
El Tribuno
Télam
CoinDesk
Reuters
About the Authors:
William L. Acosta: Magna Cum Laude graduate from PWU and Alliance University. U.S. Army veteran. He is a former police officer from New York and founder and CEO of Equalizer Private Investigations & Security Services Inc., a licensed agency in New York and Florida with global reach. Since 1999, he has led investigations into narcotics, homicides, and missing persons, also participating in state and federal criminal defense. Specialist in international and multijurisdictional cases, he has coordinated operations in North America, Europe, and Latin America.
Jesús D. Romero: Magna Cum Laude graduate from Norfolk State University. He is a former intelligence officer of the United States Navy and Operational Intelligence of the Army.
"Service member with 37 years of combined service. Worked in the defense industry with British Aerospace Systems and Booz Allen Hamilton. Participated in missions in Bosnia, Iraq, and Sudan. Commanded a unit of the Defense Intelligence Agency in Panama and oversaw operations in the Caribbean, Central, and South America. Author of bestsellers on Amazon and commentator on news in various media: radio, television, YouTube, and print."
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