A staggering $99 million worth of cryptocurrency was withdrawn from the marketplace of $LIBRA, a digital token at the center of a growing scandal in Argentina, according to blockchain researchers. The funds were funneled through eight digital wallets linked to the token’s creator, raising concerns over the legitimacy of the project.
Argentinian President Javier Milei found himself embroiled in the controversy after promoting the relatively obscure $LIBRA token on social media late Friday. However, he swiftly deleted the post and denied any association with the cryptocurrency, which experienced a dramatic surge above $4.50 per token before crashing within hours.
A federal judge is now investigating the launch of $LIBRA and any potential involvement by Milei, amid allegations that political opponents are seeking to exploit the situation for their own gain.
Blockchain Investigators Uncover Massive Withdrawals
Research firm Chainalysis revealed that eight cryptocurrency wallets collectively withdrew approximately $99 million worth of tokens from $LIBRA’s liquidity pool—a trading mechanism that facilitates crypto transactions.
Chainalysis stated that while it could not confirm the identities of the wallet holders, all of them had received tokens directly from the creator of $LIBRA.
“The on-chain behavior suggests that these addresses are closely related to the Libra creator team based on the fact that those addresses were funded directly from the Libra token creator,” Chainalysis told Reuters. The firm did not disclose when exactly the funds were withdrawn.
Rise and Fall of $LIBRA Raises Alarm
Meme coins—cryptocurrencies inspired by internet culture and trends—often experience rapid price surges followed by sharp declines, as early traders cash out for profits. While meme coins have been a staple of the crypto industry, it is rare for them to be linked to politicians.
The tokens withdrawn from $LIBRA’s liquidity pool were identified as the stablecoin USDC and Solana (SOL), another popular cryptocurrency. Chainalysis noted that the dollar value of these funds fluctuates with market conditions.
Blockchain analytics firm Nansen further reported on Wednesday that the wallets that removed tokens from $LIBRA’s marketplace “still hold a combined value of about $87 million.” The firm added, “It is fair to say that there is still a lot of money in the hands of those related to the Libra launch.”
The token debuted on a crypto exchange known as Meteora, which has yet to respond to requests for comment. According to Nansen, from Sunday to Tuesday, 70% of wallets trading $LIBRA incurred losses, highlighting the risks associated with speculative digital assets.
Key Figure in the Controversy Speaks Out
Hayden Davis, whose now-deleted LinkedIn profile identified him as CEO of crypto firm Kelsier Ventures, described himself as a “launch advisor” for $LIBRA. In a statement posted on Kelsier Ventures’ X account on Sunday, Davis claimed he controlled up to $100 million in cryptocurrency from the Libra marketplace. However, he did not clarify how or why he gained access to the funds, stating only that he intended to reinvest the money back into the token.
“I want to make it unequivocally clear that I have not, nor will I, take any of these funds for my personal benefit,” Davis wrote on X.
In an interview on Monday with crypto YouTuber Stephen Findeisen, known as “Coffeezilla,” Davis denied that $LIBRA was a “rug pull”—a type of scam where developers attract investors, drive up the asset’s price, then quickly sell off holdings, leaving other investors with worthless tokens.
“It’s not a rug. It’s a plan gone miserably wrong with $100 million sitting in an account that I’m the custodian of,” Davis said during the interview.
Reuters confirmed the authenticity of the interview with Findeisen but was unable to reach Davis for further comment. A spokesperson for Davis did not respond to requests for clarification.
Regulatory Scrutiny and Investor Fallout
The unfolding situation has raised concerns over the lack of regulation in Argentina’s crypto market, particularly regarding political endorsements of digital assets. Investors who suffered losses are demanding answers, while authorities continue their investigation into whether $LIBRA was part of a broader scheme.
As the probe deepens, questions linger over who ultimately benefited from the rapid rise and fall of the token—and whether investors will ever recover their funds.
