Key Highlights:
- Over $99 million in cryptocurrency withdrawn from Libra’s liquidity pool.
- Argentina’s President Javier Milei promoted the Libra token before backtracking.
- The token surged to $4.50 before a dramatic crash.
- Ongoing investigation raises concerns over crypto scams and meme coin volatility.
A major crypto controversy has emerged in Argentina after approximately $99 million worth of cryptocurrency was withdrawn from the marketplace of the trending Libra token ($LIBRA). Blockchain research firms have identified that these withdrawals were made by eight wallets directly linked to the token’s creator, adding to the crypto market turmoil surrounding this high-profile incident.
Javier Milei’s Crypto Endorsement Sparks Market Frenzy
On Friday, Argentina’s President Javier Milei recommended the relatively unknown meme coin $LIBRA in a post on X (formerly Twitter). However, he quickly deleted the post and denied any direct involvement. Despite the retraction, Milei’s endorsement triggered a viral response, sending the Libra crypto token price soaring to $4.50 before collapsing within hours.
As the fallout continues, a federal judge has launched an investigation into the token’s launch and whether Milei had any undisclosed ties to the project. The president, however, dismissed allegations, claiming his political rivals are exploiting the situation.
Blockchain Experts Uncover Suspicious $99 Million Withdrawals
Blockchain analytics firm Chainalysis discovered that eight wallets extracted roughly $99 million in liquidity from Libra’s DeFi marketplace, where traders buy and sell digital assets. While the exact owners remain unidentified, the data suggests these wallets are closely associated with the Libra token creators.
Another crypto analytics firm, Nansen, revealed that despite these withdrawals, the wallets still hold around $87 million worth of digital assets, reinforcing the notion that a significant amount of wealth remains in the hands of insiders.
Libra Token Price Volatility and Meme Coin Hype
The rise and fall of Libra Coin ($LIBRA) highlight the extreme volatility of meme coins—crypto assets often inspired by internet trends or celebrity endorsements. These tokens, including Dogecoin (DOGE) and Shiba Inu (SHIB), have seen rapid surges followed by massive crashes.
Although such tokens have been around for years, it is rare for them to be linked to politicians. This follows another celebrity crypto launch, as former U.S. President Donald Trump and Melania Trump introduced their own token last month.
According to Chainalysis, the withdrawn funds from Libra’s liquidity pool were largely in USDC (a stablecoin) and SOL (Solana’s native token). Given the fluctuations in Solana price and USDC’s pegging to the U.S. dollar, the exact value of these holdings remains subject to market shifts.
Who is Hayden Davis and His Role in the Libra Token Crash?
Hayden Davis, formerly listed as the CEO of Kelsier Ventures, described himself as a “launch advisor” for the Libra token. In a statement on X, Davis claimed that he had control over $100 million worth of assets from the Libra ecosystem. He assured investors that the funds would be reinvested into the token rather than cashed out.
In an interview with top crypto investigator Stephen Findeisen, aka “Coffeezilla”, Davis denied allegations that Libra was a rug pull scam—a fraudulent practice where developers lure investors before vanishing with their funds. Instead, he insisted that the project’s execution had gone terribly wrong.
“It’s not a rug pull; it’s a failed strategy that left $100 million in an account that I control,” Davis explained.
Attempts to reach Davis for further comments were unsuccessful, and the Libra crypto exchange, Meteora, has yet to provide an official response.
Investor Losses and Market Impact – What You Need to Know
Between Sunday and Tuesday, data from Nansen revealed that 70% of wallets trading $LIBRA incurred financial losses. This has reignited concerns about crypto scams, pump-and-dump schemes, and meme coin investment risks.
With the Libra token investigation ongoing, traders and investors are urged to exercise caution when engaging with speculative crypto assets. The incident serves as another cautionary tale in the world of digital currencies, reinforcing the need for research, risk management, and due diligence in cryptocurrency investments.
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