$Libra cryptocurrency scandal
On February 14, 2025, Javier Milei, the president of Argentina, promoted a cryptocurrency project called $LIBRA. The price of the meme coin spiked following Milei's promotion but then suffered a severe price drop, leading to allegations of a rug pull scam and $251 million in losses for investors. This scandal has been dubbed Cryptogate. The Economist called it the "first big scandal" of Milei's presidency.
Background
A week before $LIBRA's launch, Diógenes Casares, co-founder of decentralized finance company Stream Finance, wrote a report mentioning rumors that "a meme coin around Milei being created," including the involvement of bribes. However, he initially thought they were not real. American analyst Nick O'Neill stated that "Javier Milei and his team worked for weeks on launching a token" and claimed "with 100% certainty" that payments were involved in the development and launch of $LIBRA.On Friday, February 14, 2025, at 6:58 pm Argentina time, the Delaware-registered company Kelsier Ventures created the "$LIBRA" token libra without publicizing the event, as part of a project called "Viva La Libertad". The CEO of the company Kelsier Ventures, Hayden Davis, had previously met with Milei at the Presidential Palace in 2024. The one who introduced them was Mauricio Novelli, a young trader who has known Milei since at least 2021 and acted as an advisor to the president. Milei stated that he met the executives of KIP Protocol, who introduced him to the company's project called "Viva La Libertad", which aimed to fund private ventures in Argentina using blockchain technology, a claim later denied by KIP itself.
Key figures under investigation
Mauricio Novelli
Mauricio Novelli, an Argentine based in Buenos Aires, was responsible for introducing key players in the scam with the Milei administration. His work history included work at two companies which committed financial fraud and defrauded investors.Novelli was reported to have directed the activities of Kelsier Ventures while simultaneously claiming to represent KIP and selling access to Milei to cryptocurrency investors without Milei's knowledge.
Following the scandal, Novelli's home was reported to have been raided by police following an order by the prosecutor in the case and his assets were frozen. In May 2025, footage was released by law enforcement of Novelli's mother, María Alicia Rafaele, and sister, María Pía Novelli, emptying safety deposit boxes at a bank resulting in their assets also being frozen.
Hayden Davis
Hayden Mark Davis, an American cryptocurrency marketer who has been involved in a number of memecoin pump and dump schemes, was a key player implicated in the $Libra cryptocurrency scandal. Davis, as CEO of Kelsier Ventures, participated in the launch of the token. Kelsier Ventures is operated by Davis along with his brother Gideon and their father, Tom, and was initially founded during the COVID-19 pandemic. The company first advised on marketing strategies for non-fungible tokens, later focusing on cryptocurrencies and blockchain clients in 2022.Davis was one of seven children raised by his parent, Tom Davis, in Colorado. His father, Tom Davis, counterfeited checks and assumed fake identities in his youth, spending one year in prison. Tom would later work as a minister in Colorado and headed a Christian charity for several years, going on to write five books, each investigating different subjects, like gold mining in Guyana and the sex-trade industry in Russia. Hayden's mother, Emily Davis, was born into the Church of the First Born of the Lamb of God, a polygamist Mormon fundamentalist group led by her grandfather, Ervil LeBaron. The group practiced a type of blood sacrifice, leading to the murders of both supporters and detractors of LeBaron, including Emily's father, Mark Chynoweth. At age 17, Davis sold energy drinks for Limu, a multi-level marketing company his father was involved with. He attended Liberty University for two semesters on a scholarship to play soccer as a goalkeeper for the Flames. He also founded a T-shirt printing company, interned for a private-equity firm, experimented with e-commerce, and joined a professional Spanish soccer team for short time.
Kelsier Ventures established business relationships with multiple crypto-related entities including Cube Exchange, Saturn, and Ben Chow, the cofounder of Meteora. The firm partially handled the launch of the $Melania token, a memecoin created by Melania Trump two days after the initial coin offering of the $Trump token, in addition to the $Libra token. The firm has also participated in the launch of the $Enron token. Davis admitted to his involvement in "sniping" the $Melania and $Libra tokens, an illegal practice similar to front running. In April 2025, blockchain data provider Bubblemaps reported that Davis removed $100 million in liquidity from $Libra using similar strategy employed with the $Melania token.
Prior to launching Libra, Davis claimed to be an adviser to Argentine president Javier Milei, having met with him multiple times in Buenos Aires, although the Argentine government has denied any direct connection to Davis. On February 17, 2025, Davis participated in an interview conducted by Coffeezilla, where Davis claimed to have profited US$113 million from the currency and denied allegations of conducting a rug pull scam. On March 13, an Argentine prosecutor sought permission to issue an Interpol "Red Notice" for Davis, stating the following: "The possibility that Davis will abandon his country of residence or hide to avoid answering for his alleged acts appears to be aggravated by the economic resources he possesses, which he can use to move or remain in hiding, hindering our investigation."
In October 2025, Davis and Chow were named in a class action lawsuit alleging that Melania Trump's memecoin, among fifteen tokens, was part of a scheme utilizing "weaponized fame to disarm diligence." In the following month, an Argentinian judge ordered the freezing of assets belonging to Davis, Favio Camilo Rodríguez Blanco, and Orlando Rodolfo Mellino, who each appeared as registered owners of virtual wallets under judicial scrutiny. The wallets contained a value estimated between 100 and 120 million dollars.
In December 2025, it was reported by Clarín that Davis had signed a confidential agreement with the Argentinian government, appointing him as an unpaid specialized advisor two weeks prior to the release of the $Libra token. The contract specified that Davis would provide pro bono advice on blockchain and artificial intelligence-related materials. During the signing of the document, while Davis was in Argentina, multiple transactions were made to intermediaries, linking the cryptocurrency project to him.
Promotion by Milei
Three minutes after the token's creation, on Friday, February 14, 2025, at 7:01 pm Argentina time, Milei shared posts promoting the coin on his X, Instagram, and Facebook accounts. The posts described it as launching a private economic initiative to stimulate economic growth in Argentina through investment in small businesses and startups. Milei stated that the project operated under the token identifier $LIBRA and was structured to facilitate private investment in Argentine enterprises. He posted the project's associated blockchain contract address in the same message.Immediately after Milei's post, $LIBRA's value surged from $0.000001 to $5.20 in 40 minutes. The founders of $LIBRA held 70% of the total supply, and once the price reached a certain level, they abruptly sold their holdings, crashing the price by 85%. Within a few hours, its price dropped to $0.99. The market cap of $LIBRA reached $4,6 billion, then fell to only $162 million by February 15. Three hours later, the nine founding accounts had made approximately $87 million at the expense of an estimated 74,000 investors. The event has been described as being a type of scam commonly known as a "rug pull".
The tweet by President Javier Milei that launched the $LIBRA project was shared by the President of the Lower House, Martín Menem, by national deputies José Luis Espert and Damián Arabia, and also among supporters of La Libertad Avanza such as Gordo Dan, Agustín Laje, and Emmanuel Danann.
There was speculation that Milei's account might have been hacked, which was denied by members of La Libertad Avanza, such as Lilia Lemoine, and then by Milei himself when he disassociated himself from the project in a later tweet.
On February 17, after a new tweet from Javier Milei retweeting Darío Epstein, the cryptocurrency rose again, only to collapse again.
Twitter users began to use the platform's Community Notes feature to warn users about a possible rug pull scam under the initial promotional tweet.
Retraction
Hours after the initial promotion, President Milei withdrew his endorsement and deleted the social media post. In a follow-up statement, he acknowledged sharing the information without properly verifying the project's details, explaining that he had no connection to the enterprise. The president characterized the incident as one of many routine social media posts he had made before in support of private enterprise initiatives. President Milei criticized political opponents he accused of attempting to exploit the situation.At roughly the same time, the company KIP Network Inc. posted a message describing the $LIBRA project as a success and stated that President Milei had never been involved with the project's development. The message was reported to have been drafted by Mauricio Novelli who instructed that it be posted.
Hayden Mark Davis, the owner of Kelsier, published a statement declaring that he had been an advisor to the Argentine government and that the advertising campaign had been previously agreed upon with the president's team and accused Milei of "betrayal" for abruptly withdrawing his support.