Argentina’s President Javier Milei has publicly distanced himself from the LIBRA meme coin following backlash over allegations of a potential financial scandal.

The controversy began on February 14 when Milei’s X account promoted LIBRA, a meme coin based on Solana, causing a significant uptick in trading volume and pushing the token’s market cap to $4.5 billion briefly.

The project claimed to be aimed at supporting Argentina’s economy by providing funding to local businesses and ventures, with Julian Peh of KIP Protocol confirming their involvement in managing fund allocation. However, doubts arose regarding the legitimacy of the project, especially regarding the source of funds and lack of KYC verification.

Upon realizing the concerns raised by the crypto community, Milei clarified his initial support for the project, citing that he was unaware of certain details and subsequently deleted his promotional tweet, leading to a drastic 90% drop in LIBRA’s price.

In the aftermath, blockchain analysis pointed to insiders withdrawing approximately $107 million, raising suspicions of liquidity manipulation and profiteering. Insider trading activities were also reported, with individuals allegedly profiting from buying and selling around the time of promotional tweets.

The LIBRA debacle has sparked discussions within the crypto industry about the risks associated with politically affiliated meme coins and the need for stricter regulation to protect investors. Industry leaders have criticized the trend of meme coins and called for accountability, emphasizing the importance of legal consequences for those responsible for such schemes.

This incident serves as a cautionary tale about speculative meme coins, particularly when connected to political figures, underscoring the importance of due diligence and vigilance in the crypto market.