Argentina's President Javier Milei could be subjected to impeachment proceedings after facing widespread criticism for promoting a cryptocurrency that spectacularly crashed hours after his endorsement, wiping billions from its value.

The libertarian president posted a message on X on February 14 evening, endorsing a novel "private project" called $LIBRA, which purported to stimulate Argentina's economy by financing small businesses. The token's value surged to nearly $5,000 per coin, reaching a market capitalisation of $4.6bn – comparable to a major Argentine bank – before plummeting to under $1 within hours.

Argentina's fintech chamber has acknowledged the possibility that the incident represents a "rug pull" – a fraud scheme where token creators attract investors before rapidly cashing out. According to crypto intelligence firm Lookonchain, insider wallets linked to the project extracted more than $107mn in liquidity, including 57.6mn USD Coin and 249,671 Solana tokens worth $49.7mn, Cointelegraph reported.

Javier Smaldone, a crypto influencer known for uncovering pyramid schemes, confirmed these estimates and dubbed the short-lived operation a "global scam” in an X post.

"So far, it has been discovered that the profit made is around $107mn, maybe more," he told AFP.

Blockchain analysts had warned about the project's murky structure even before the meltdown. Analysis firm Bubblemaps, cited by Cointelegraph, revealed that 82 per cent of the supply was unlocked and sellable from the start, with two accounts controlling 70 per cent of the token's total supply – a red flag for potential price manipulation.

Before backtracking, the self-described “anarcho-libertarian” leader lashed out at his critics slamming them as "filthy rats of the political caste" seeking to take advantage of the situation.

Milei deleted his $LIBRA endorsement post on X after several hours, stating he "was not aware of the details of the project" and had "no connection whatsoever" with the private enterprise. His personal lawyer, Francisco Onato, defended him, arguing his actions did not constitute a crime due to “lack of criminal intent.”

After the backlash, the presidential office announced on February 15 that Milei had requested the Anti-Corruption Office to investigate potential misconduct by any government official, including himself. The office’s statement confirmed the president had met with representatives of KIP Protocol, the platform behind $LIBRA, in October 2024, and with crypto entrepreneur Hayden Davis in January at Casa Rosada, but denied the latter’s direct involvement with Milei.

"All the information gathered in the investigation will be handed over to the courts to determine whether any of the companies or individuals linked to KIP Protocol’s project committed a crime," the statement said

In response, Davis released a statement on February 16 claiming that Milei and his team had reneged on previous agreements by withdrawing their support and deleting their social media endorsement.

The saga deepened after Charles Hoskinson, co-founder of cryptocurrency Ethereum, alleged that organisers of a tech forum where Milei met KIP Protocol representatives had solicited payments in exchange for access to the president, La Nacion reported. Hoskinson claimed he rejected the request as it would violate US foreign corrupt practices law.

"I think there are some people in that circle around Milei who took advantage of his lack of knowledge of our industry," Hoskinson said while defending the president's intentions. "They used the President of Argentina to basically make a bunch of money."

Embittered opposition lawmakers are now moving to launch impeachment proceedings. "This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president," said opposition lawmaker Leandro Santoro, as quoted by Reuters. Former Peronist president Cristina Kirchner, meanwhile, branded Milei a "crypto-scammer".

This is not the first time Milei has come under scrutiny over crypto mishaps. Opposition leader Martín Lousteau noted that in 2021, while serving as a national deputy, Milei promoted the CoinX platform, which is now under investigation for alleged fraud.

The episode comes as Milei's government struggles to attract foreign investment despite implementing business-friendly reforms and wide-reaching cost-cutting programmes, which have been praised by the IMF.

“We recognise the enormous progress that Argentina has made in reducing inflation, stabilising the economy, returning to the path of growth and with poverty finally beginning to decline,” IMF Spokesperson Julie Kozack recently said while announcing “good progress” on talks over a much-needed new loan programme.

The country, still plagued by currency controls set to be lifted next year, faces additional headwinds from blanket tariffs being imposed by the Trump administration despite Milei’s close relationship with the US president.

Milei’s $LIBRA controversy follows a recent surge in politically-linked cryptocurrency launches, most notably the Official Trump ($TRUMP) memecoin, which returning US President Donald Trump launched in January on the Solana network ahead of his inauguration, followed by First Lady Melania Trump's Melania Meme (MELANIA) own token.