An Argentine court has ordered a sweeping freeze on the assets of three individuals connected to the collapsed $LIBRA memecoin scandal, deepening an investigation into alleged bribery involving the office of Argentine President Javier Milei.
The scandal, dubbed "Cryptogate" by some, centers on a sudden "pump-and-dump" scheme that led to massive losses for retail investors, shortly after the project received a brief, high-profile endorsement from the President.
The Center of the Controversy
The memecoin, launched by Kaiser Ventures CEO Hayden Davis, was initially promoted as a novel way to finance small businesses in Argentina. The project gained meteoric traction in early 2025 after President Milei briefly promoted Davis on social media as an advisor on blockchain and AI.
- The Pump: Following the President's post - which he later deleted - $LIBRA's market capitalization skyrocketed, reportedly reaching a peak of several billion dollars.
- The Dump: Within hours, the token's value crashed by over 85-90%, wiping out an estimated $251 million from over 40,000 investors in what investigators described as a "rug pull" scam.
- The Allegation: Prosecutors in Argentina are focusing on a highly suspicious transaction: Davis allegedly transferred $507,500 via the Bitget exchange just 42 minutes after publishing a selfie with President Milei. The prosecution suspects this rapid transfer may have been a bribe to Milei or his inner circle through intermediaries for the presidential endorsement.
Judicial Action and Asset Freeze
Federal Judge Marcelo Martínez de Giorgi approved the prosecutor's request for a "prohibición de innovación"—a freeze on assets. The order specifically targets the movable, immovable, and financial assets of Davis and two alleged intermediaries in Argentina: Orlando Rodolfo Mellino and Favio Camilo Rodríguez Blanco.
The asset freeze, which covers digital wallets and bank accounts, is intended to prevent the suspects from moving or hiding funds - estimated to be between $100 million and $120 million in potential fraud proceeds - until the case concludes.
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International Dimensions and Political Fallout
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The LIBRA case has become a rare instance of coordinated judicial action across two continents:
- Argentina: While the Anti-Corruption Office cleared President Milei of ethics violations in June, the criminal investigation continues to probe the transfer of funds and the possibility of "indirect payments to public officials." Milei has consistently denied knowing the project's details or urging anyone to buy the token.
- United States: The U.S. District Court for the Southern District of New York also became involved, freezing approximately $57 million in USDC stablecoins tied to Davis and collaborators at the defunct Meteora exchange. A class-action lawsuit filed by American and Latin American investors in the U.S. named Milei merely as "scenery" in the token's promotion campaign, placing the main blame on Meteora founder Benjamin Chow.
The entire scandal underscored the high risks associated with highly centralized memecoin projects and the immense influence public figures can wield over volatile crypto markets. The legal battles in both countries signal a growing focus by global regulators on prosecuting high-profile crypto fraud schemes.
Author: Slava Vasipenok
