The self-proclaimed anarcho-capitalist president has a long association with the world of cryptocurrency, which is popular among the libertarians who are his strongest supporters in the country. Crypto is also more common in Argentina than in many other countries because it can serve as a convenient way to escape the nation’s ubiquitous inflation, which rapidly devalues the domestic peso. These associations came back to haunt him, however, when he made a post promoting a “memecoin”—a cryptocurrency with no substantive uses except for speculation—called $LIBRA:
Libertarian Argentina grows!!! This private project will be dedicated to the growth of the Argentine economy, funding small businesses and Argentine entrepreneurship. The world wants to invest in Argentina…

$LIBRA
With the support of the popular Argentine president, investors began to pour money into $LIBRA, with the price skyrocketing immediately after the post was made. Unluckily for investors, however, the president’s post was entirely false: $LIBRA would never be used for promoting Argentine businesses, nor was there any mechanism for it to do so. Instead, the creators of the currency, who held massive proportions of the coin, sold off everything 45 minutes after the president’s post, pocketing $100 million dollars and crashing the coin’s value. Anyone who didn’t sell off early lost nearly everything.

Within a few hours, the president realized he had put himself in a bad spot and deleted the tweet, but it was much too late. Recriminations were already beginning to fly, and the incident has cast a shadow over his presidency, which had been generally successful until now. In interviews with crypto media figures in the United States, one of the coin’s creators revealed that he’d had contact with Milei for years and had paid the president to make a video promoting his online cryptocurrency academy, and suggested that he had paid the president’s sister Karina Milei—who serves as the general secretary of the Argentine executive branch—for access to the president.

Milei’s own defense made things little better for him. While he had promoted the cryptocurrency by claiming that it would serve as a vehicle for funding Argentine small business, he argued afterwards that losses from investors were not his fault because buying crypto is just a form of gambling.

“The reality is if you go to the casino and lose money, I mean, what is the claim if you knew that it had those characteristics?” he said in an interview in February.

The defense certainly was not convincing to his critics, and even to some of his own supporters (a portion of which lost money because of the scandal). The Peronist opposition quickly seized on it as a point of political attack, and is now seeking to leverage the scandal to hurt the political prospects of the president’s party La Libertad Avanza (LLA) in the upcoming legislative elections this year. On Thursday, the opposition scraped together a quorum in the Chamber of Deputies to vote to empower the Political Judgement Committee to investigate the scandal with the help of a disgruntled section of LLA itself. That political catastrophe was barely averted by the president of the chamber, and resulted in a sharp conflict between LLA legislators, where Rocío Bonacci threw a cup of water at fellow libertarian deputy Lilia Lemoine.

The entire debacle has been a rare and egregious misstep from the president, who had until recently demonstrated impeccable political instincts, claiming a stunning upset victory in the presidential election, averting the economic catastrophe of hyperinflation, massively reshaping the structure of Argentine government, tying up major political alliances with competing political parties, and wrangling major legislation through the legislature. While there is no evidence to suggest that the president profited personally from the scandal, it demonstrates a distinct lack of foresight, the product perhaps of the long association between the libertarian political environment and cryptocurrency boosters, many of whom promote unscrupulous projects, like $LIBRA.

So far, however, the scandal seems to be relatively contained. While it may make it more difficult for Milei to campaign effectively and achieve his political objectives, for now, at least, the damage is not likely to end his effectiveness as president.

Our mailing address is:
The American Conservative

910 17th Street, NW

Suite 400

Washington, DC 20006-2604

Add us to your address book

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.