The memecoin craze, fueled by scandals like the Milei-promoted LIBRA coin, has led to billions in losses and damaged the crypto industry's reputation, prompting calls for greater scrutiny and regulation.

DL News reports that a new wave of speculative memecoin launches, epitomised by the scandal around the $LIBRA token promoted by Argentine president Javier Milei, has triggered large investor losses and intensified criticism of the crypto sector’s governance and ethics. In February 2025, Milei briefly endorsed the LIBRA token on X as a private initiative meant to support Argentine small businesses before deleting the post as the token’s price collapsed; on‑chain analysis and subsequent investigations indicate a likely “rug pull” in which insiders withdrew millions in liquidity while late retail buyers were left with near‑worthless tokens. The incident has led to criminal investigations in Argentina into possible fraud, bribery and abuse of authority, and has become one of the highest‑profile examples of how political figures and influencers can help fuel rapid speculative bubbles in memecoins. According to blockchain analytics from TRM Labs and local reporting, LIBRA’s market capitalisation briefly surged to around $4.5 billion following Milei’s promotion, before losing more than 90% of its value within hours as wallets linked to the project siphoned out roughly $7.8 million in SOL from a DeFi liquidity pool on Solana. Argentina’s prosecutor’s office is examining alleged arrangements worth up to $5 million between intermediaries and the token’s promoters in exchange for presidential backing, while a congressional commission has said Milei provided “essential collaboration” to what it describes as an international crypto fraud. DL News situates this episode within a broader memecoin boom across networks like Solana, where thinly‑documented tokens, insider allocations and influencer‑driven hype cycles have produced billions in paper gains and losses, damaging the broader industry’s reputation and prompting renewed calls from regulators and market participants for stricter disclosure rules, enforcement against market manipulation, and clearer responsibilities for public figures who promote high‑risk tokens.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• $LIBRA scandal is Milei's greatest threat - Buenos Aires Times (batimes.com.ar)
• Tracking the Memecoin That Launched a Scandal in Argentina (trmlabs.com)

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