• Judge Marcelo Giorgi issued a prohibition on asset innovations to safeguard proceeds from the LIBRA fraud.

• Investigations reveal suspicious crypto transfers and connections to high-level political figures in Argentina.

• Prosecutors estimate damages exceeding $100 million, with technical reports supporting asset freezes on wallets and properties.

Discover the latest on the LIBRA memecoin scandal: Argentine judge freezes assets amid $100M+ fraud probe. Uncover political ties, key players, and investor impacts—stay informed on crypto regulations.

What is the LIBRA Memecoin Scandal?

The LIBRA memecoin scandal refers to a high-profile cryptocurrency fraud in Argentina tied to President Javier Milei’s image, where promoters allegedly orchestrated a rug pull that defrauded investors of up to $120 million. Launched with promotional hype, including a tweet from the president featuring advisor Hayden Davis, the token collapsed rapidly, draining funds through coordinated market manipulations. Authorities, supported by financial investigation reports, have now intervened to freeze assets and trace illicit proceeds.

How Did Judge Marcelo Giorgi Respond to the LIBRA Case?

Federal Judge Marcelo Giorgi approved a precautionary measure requested by prosecutor Eduardo Taino, imposing an indefinite prohibition on asset innovations for Hayden Davis and two crypto operators, Orlando Mellino and Favio Rodriguez. This action, backed by a technical report from the Secretariat for Financial Investigation and the Recovery of Illicit Assets, as well as the General Directorate for Asset Recovery and Forfeiture of Goods, aims to preserve properties and financial holdings potentially derived from the fraud. The report, signed by Maria Bergalli and Maria Chena, highlighted suspicious wallet activities and multimillion-dollar transactions linking the suspects to the scam’s money trail.

Giorgi determined that the case met legal criteria for plausibility and urgency, emphasizing the risk of suspects dissipating crypto assets before resolution. He mandated notifications to the National Securities Commission (CNV) to extend blocks across virtual asset service providers (VASPs) in Argentina, ensuring comprehensive coverage on all operating platforms. This judicial step underscores the growing scrutiny on memecoin schemes blending political endorsements with financial deception.

Local media outlets have detailed how Mellino and Rodriguez served as intermediaries in crypto-to-fiat conversions, facilitating transfers between Davis and other LIBRA figures like Mauricio Novelli and Manuel Godoy. Rodriguez’s role extended to arranging a safety deposit box where Novelli’s family allegedly accessed funds post-collapse at a Banco Galicia branch, adding layers to the evasion tactics under investigation.

Frequently Asked Questions

What Role Did Hayden Davis Play in the LIBRA Memecoin Scandal?

Hayden Davis, an American businessman positioned as a blockchain and AI advisor to President Milei, is central to the LIBRA memecoin scandal for promoting the token and handling suspicious transfers. Just 42 minutes after Milei’s January 30 tweet featuring Davis, he moved $507,500 through Bitget exchange, prompting probes into potential bribes and influence peddling. Leaked messages from Davis reveal boasts of controlling political actions via family connections, supporting claims of a coordinated fraud draining retail investors.

Are There Political Connections in the LIBRA Fraud Investigation?

Yes, documents show early discussions between Mauricio Novelli and President Milei about monetizing the president’s image through crypto projects, predating LIBRA’s launch by three months. While Novelli viewed Milei’s persona as a free asset under Argentine law, the president’s lawyer, Diego Spagnuolo, raised conflict-of-interest concerns. These ties, combined with promotional activities, have intensified the probe into whether official endorsements enabled the $100-120 million investor losses from the rug pull.

Key Takeaways

• Asset Preservation is Critical: Judge Giorgi’s freeze on properties and wallets prevents further loss of fraud proceeds, demonstrating judicial tools to combat crypto scams.
• Suspicious Transactions Exposed: Multimillion-dollar flows via intermediaries like Mellino and Rodriguez highlight the challenges in tracing memecoin funds across borders.
• Regulatory Alerts Issued: Notifications to the CNV ensure blocks on VASPs, urging investors to verify endorsements and avoid politically hyped tokens.

Conclusion

The LIBRA memecoin scandal exemplifies the perils of unregulated cryptocurrencies intertwined with political influence, as seen in asset freezes by Judge Marcelo Giorgi amid a $100-120 million fraud probe. With investigations revealing deep connections between Hayden Davis, local operators, and presidential promotions, authorities are prioritizing recovery for defrauded investors. As crypto markets evolve, stronger oversight on memecoins and endorsements will be essential—investors should prioritize due diligence and monitor regulatory updates for safer participation.

In the wake of the LIBRA collapse, prosecutors continue dissecting the promotional machinery that lured hundreds into the scheme. Leaked communications, including Davis’s audacious claims of manipulating decisions through payments to Milei’s sister Karina, paint a picture of influence peddling at the highest levels. “I send money to his sister and he signs what I say and does what I want. Crazy,” Davis messaged a financier, underscoring the alleged corruption.

Plaintiffs describe the operation as a classic rug pull: aggressive marketing built false hype, while insiders controlled supply to execute a sudden dump. This drained liquidity from unsuspecting retail participants, many in Argentina’s volatile economy seeking quick gains. The prosecutor’s analysis of Bitget transfers suggests these moves obscured bribe trails, with lobbyist plans aiming to exploit Milei’s libertarian appeal for profit.

Despite objections from Spagnuolo citing ethics laws like Decree 41/99, the project proceeded, leading to the current judicial clampdown. Bergalli and Chena’s report provides forensic evidence of illicit flows, reinforcing the need for international cooperation in crypto cases. As the prohibition persists, it signals a tougher stance against scandals blending politics and digital assets.

Broader implications extend to Argentina’s crypto landscape, where VASPs must now comply with heightened scrutiny. Investors worldwide can learn from this: endorsements from figures like presidents do not guarantee legitimacy, and rapid memecoin launches often mask risks. Ongoing proceedings will likely yield more revelations, potentially reshaping trust in politically affiliated tokens.