Review of the LIBRA Coin Incident in Argentina: A Well-Planned “Scam”?
On February 15, 2025, Argentine President Javier Milei announced the launch of a meme coin called LIBRA via his official social media accounts, claiming that the token would “promote Argentina’s economic growth” and directly published the token contract address. After the announcement, LIBRA’s price skyrocketed to $4.96, with its market cap approaching $5 billion, but then crashed by over 85% in a few hours, reducing its market cap to under $200 million, triggering a massive market shock.
Meanwhile, on February 15, it was reported that President Javier Milei had deleted his earlier tweet promoting LIBRA, stating: “A few hours ago, I posted a tweet supporting a so-called private company, just like I have done many times before. But apparently, I have no relationship with this company. I don’t know the details of the project, and after learning more, I decided to stop promoting it (which is why I deleted the tweet). To those political groups who want to use this situation to cause harm, I want to say, you are proving how despicable politicians are every day, and this only strengthens my resolve to kick you out with my feet.”
This explanation clearly failed to convince the market. Perhaps to add credibility, on the same day, President Javier Milei decided to immediately request the Anti-Corruption Office (OA) to intervene to determine whether any members of the national government, including the president himself, were involved in any wrongdoing.
On the other hand, President Milei decided to establish an investigation task force (UTI) at the presidential palace, consisting of representatives from agencies and organizations related to crypto assets, financial activities, money laundering, and other related fields. They would collect information and urgently investigate the launch of the LIBRA cryptocurrency and all companies or individuals involved in the actions. All information gathered during the investigation would be handed over to the courts to determine whether any companies or individuals involved in the KIP Protocol project had committed crimes. President Milei demonstrated his commitment to the truth through these actions, vowing to fully clarify the incident.
What Exactly Happened with the LIBRA Coin? Who is KIP Protocol and What Role Did it Play?
This article will review in-depth the issuance process of the LIBRA coin, the market response, fund flows, and potential controversies, exploring whether this was a meticulously planned “scam.”
Event Timeline 1: The President’s Tweet Triggering Market Frenzy
On the early morning of February 15, 2025, Milei posted the LIBRA contract address on X (formerly Twitter) and Instagram, claiming that the token would be used to fund small and medium-sized enterprises and local projects in Argentina. After the announcement, a large influx of investors flooded the market, pushing the LIBRA market cap close to $5 billion in a short time.
It is worth noting that the LIBRA coin’s contract address was not officially verified by platforms like Moonshot but was instead displayed via their “token registration feature.” This meant investors could only participate in trading by manually inputting the contract address, and the platform had issued a risk warning.
Event Timeline 2: Price Crash and President’s “Withdrawal”
The price surge of LIBRA was very short-lived. After reaching a peak of $4.61, its price rapidly plummeted, dropping more than 85% within 4 hours, eventually falling to around $0.16. Meanwhile, Milei deleted the promotional tweet and claimed that he “did not know the details” of the project, emphasizing that LIBRA was a “private project” unrelated to him.
This reversal intensified market panic. According to on-chain data, LIBRA’s trading volume reached $1.2 billion within 4 hours of launch, but most investors suffered significant losses. For example, a user with address HJXRy9…hzQiaz bought LIBRA for $2.85 million but sold at $781,000, incurring a loss of over $2 million.
Event Timeline 3: LIBRA Team Points to KIP Protocol
Although Milei attempted to distance himself from the project, the team behind LIBRA pointed to the Singapore-based KIP Protocol. KIP Protocol claimed to be backed by institutions such as Animoca Ventures and Tribe Capital, with key members including Julian Peh (Bai Qihao), a graduate of the National University of Singapore. However, Animoca Brands later clarified that, while they had invested in KIP Protocol in 2024, they had not participated in the launch of LIBRA.
The internet has a memory and a trace, and despite Animoca’s strong denial, KIP Protocol played multiple roles in this incident:
Technical Development: Responsible for designing the LIBRA coin’s smart contracts and liquidity management.
Fund Allocation: Claimed to raise funds for supporting local Argentine businesses but did not disclose specific allocation details.
Public Relations: Used social media to emphasize the “legitimacy” of LIBRA and accused losing investors of “emotional accusations.”
Event Timeline 4: Cash-Out Path and Insider Trading
On-chain data reveals that the LIBRA team and related addresses cashed out about $107 million in liquidity, including 57.6 million USDC and 249,000 SOL. What’s more concerning is that some addresses withdrew USDC and SOL from centralized exchanges (CEX) hours before the president’s tweet and quickly bought in after the tweet was posted, then sold at high prices. For instance, address Gr3eiF…RtS4eb used an initial investment of $900,000 to profit $8.7 million, with a return of 867%.
Such operations exposed typical insider trading characteristics. Although KIP Protocol denied a “rug pull,” the flow of funds significantly deviated from the project’s claimed “economic relief” goal.
While there is no 100% proof to definitively state that KIP Protocol is the mastermind behind the LIBRA incident, a review of the facts strongly suggests so. The specifics depend on individual interpretation.
Behind the Farce: Concerns Over Celebrity Coin Issuance
Although Argentina had previously discussed cryptocurrency cooperation with El Salvador, its regulatory framework remains in a vacuum. The launch of LIBRA had no technical whitepaper, nor did it undergo compliance review, relying entirely on social media promotion. This model created a fertile ground for market manipulation.
Moreover, Milei is not the first politician to venture into the crypto space. In January 2025, former U.S. President Donald Trump launched his personal meme coin, TRUMP, which surged 1250% on the first day, only to see its price halve due to the competitive launch of Melania Coin (MELANIA), causing over 260,000 investors to be liquidated within 24 hours.
In February 2025, the President of the Central African Republic launched the meme coin CAR, but investigations revealed its official website domain had only been registered for 4 days, with 80% of the tokens concentrated in six associated addresses, and security measures were nearly non-existent.
Such cases show that political endorsements often serve as short-term traffic tools rather than long-term value support.
Lessons from the LIBRA Incident
The crash of LIBRA is not an isolated incident but rather a reflection of the growing trend of “politicization” and “entertainment” in the crypto market. When national credit is misused as a tool for exploitation, and technological innovation is reduced to a shield for capital games, market participants must adopt a more rational attitude when evaluating so-called “presidential-level projects.”
For ordinary investors, two key principles should be adhered to:
Stay away from opaque meme coins, especially those reliant on celebrity endorsements for short-term speculation.
Pay attention to on-chain data validation, using address monitoring and fund flow analysis to identify potential risks.
In this “perfect storm,” LIBRA may eventually be forgotten, but the market loopholes and human dynamics it revealed will serve as a long-term warning to every participant in the crypto industry.
