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Argentine judge drops $LIBRA fraud case against Milei

Argentine judge drops $LIBRA fraud case against Milei

Rule Changes

Federal court finds no criminal offense in the president's promotion of a crashed crypto token, and no appeal is expected

Yesterday: Milei says he may sue La Nación over $LIBRA coverage

Overview

Updated 4 hours ago

On October 23, Federal Judge Marcelo Martinez de Giorgi cleared President Javier Milei, his sister Karina and nine others of fraud over the $LIBRA token, ruling that the promotion was not a crime. About 40,000 buyers lost money when the token, launched at roughly a cent, spiked near $5 and collapsed within hours.

Prosecutor Eduardo Taiano asked for the dismissal and will not appeal. Investor lawyers were removed from the case in September, so no party is left to challenge the ruling, which should become final within days. Milei said he may sue La Nación over its coverage and called the case "extortion"; on October 2 a New York judge dismissed a US class action against the token's backers.

Why it matters

A head of state was cleared of fraud over a crypto token he promoted; tens of thousands of investors have no criminal path to recovery.

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Key Indicators

$251M
Estimated investor losses
TokenPost estimated total losses at about $251 million across roughly 114,000 wallets, with about 86% of traders losing money.
40,000+
Buyers who held $LIBRA
The federal resolution refers to more than forty thousand people who had bought the token before it crashed.
11
People cleared by dismissal
Judge Martinez de Giorgi cleared Milei, his sister Karina, and nine other defendants.
$100M
Pulled by creator-linked wallets
Around $100 million withdrawn by a few wallet addresses, per the court resolution; BBC reported about $90 million, more than 80% of circulating funds.
$4.6B
Peak market capitalization
Market cap briefly reached about $4.6 billion after Milei's post, then fell more than 90%, according to TokenPost.

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People Involved

Javier Milei
Javier Milei
President of Argentina
Cleared of fraud charges; the ruling is expected to become final because no appeal is planned
 Karina Milei
Karina Milei
Secretary-General of the Presidency and the president's sister
Cleared of all allegations in the $LIBRA case
MG
Marcelo Martinez de Giorgi
Federal judge
Dismissed the $LIBRA investigation
 Eduardo Taiano
Eduardo Taiano
Federal prosecutor
Recommended the dismissal, which the judge granted; will not appeal
 Hayden Mark Davis
Hayden Mark Davis
US businessman, self-described $LIBRA "launch adviser"
Cleared in Argentina; no US charges, and a US class action against the token's backers was dismissed

Organizations Involved

SG
Secretaría General de la Presidencia
Presidential office
Cleared of wrongdoing in the $LIBRA case

The office that runs Argentina's presidential administration, led by the president's sister.

Timeline

February 2025 October 2026

6 events Latest: Yesterday
Tap a bar to jump to that date

  1. Milei says he may sue La Nación over $LIBRA coverage

    Latest Reaction

    After his dismissal, Milei attacked the newspaper and journalist Hugo Alconada Mon over their reporting and said he was weighing legal action with his lawyers.

  2. Judge dismisses $LIBRA case

    Legal

    Judge Martinez de Giorgi clears Milei, his sister, and nine others, ruling the promotion was not a criminal offense.

  3. US judge dismisses $LIBRA class action

    Legal

    Judge Jennifer L. Rochon dismissed a class action against Kelsier Ventures, Meteora and developer Benjamin Chow and refused leave to amend; the ruling awarded buyers no compensation.

  4. Investor plaintiffs removed from $LIBRA case

    Legal

    Judge Martinez de Giorgi excluded the lawyers representing affected buyers as plaintiffs on July 3; the Federal Chamber's Sala I upheld that exclusion, leaving no accusing party.

  5. Milei promotes $LIBRA on X

    Event

    Milei posts about the $LIBRA token on X; priced at about $0.01 at launch, it climbed to near $5, then crashed as creator-linked wallets sold.

  6. Fraud investigation opens

    Investigation

    Federal prosecutor Eduardo Taiano opens an inquiry into suspected fraud in the token's launch and promotion.

Scenarios

1

Appeals court overturns dismissal, investigation resumes

Possible Resolves by End of 2027

Discussed by: Perfil noted the ruling can be appealed; investors were excluded as parties in the original case

The dismissal is not final. Affected investors or other parties could appeal to Argentina's Federal Chamber of Cassation, arguing that the judge applied the fraud statute too narrowly. If the chamber reinstates the investigation, the case would resume where it left off.

2

Dismissal stands; $LIBRA criminal case legally closed

Likely Resolves by End of 2027

Discussed by: The prosecutor himself recommended dismissal, and the judge agreed

With the prosecution recommending dismissal and the judge finding no criminal offense, an appeal is unlikely to succeed. The case ends, and the 40,000-plus affected investors have no criminal channel for restitution. Political scrutiny of the episode may continue outside the courts.

3

US authorities pursue separate action against Hayden Davis

Possible Resolves by End of 2027

Discussed by: Reuters and blockchain researchers highlighted the $99 million in wallet withdrawals linked to the token's creator

The Argentine dismissal does not bind US prosecutors. If the US Department of Justice or Securities and Exchange Commission determines that Davis's role in the token's launch and sell-off violated US law, he could face separate proceedings. No US action has been announced.

4

Dismissal becomes final with no appeal

Likely Resolves by Nov 30, 2026

Discussed by: Perfil, citing the prosecutor's decision not to appeal and the exclusion of investor plaintiffs

Prosecutor Eduardo Taiano asked for the case to be closed and will not appeal, and the lawyers for affected buyers were removed as plaintiffs in September 2026. Once the short appeal window lapses, the criminal case ends and the roughly 40,000 buyers have no criminal route to compensation.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

November 2021

Squid Game token rug pull (2021)

The developers of a Squid Game-themed token (SQUID) disappeared with roughly $3.38 million after the token's price spiked and then crashed about 99.99% in minutes. The token had no official connection to the Netflix series.

Then

Exchanges delisted the token, and affected investors had little recourse.

Now

It became the textbook example of a "rug pull," the mechanism alleged in the $LIBRA case, in which token creators pump value and then dump their holdings.

Why this matters now

In the $LIBRA case, blockchain researchers linked eight digital wallets to the token's creator that withdrew around $99 million before the crash, a similar dump pattern.

October 2022

Kim Kardashian SEC settlement (2022)

The Securities and Exchange Commission fined Kim Kardashian $1.26 million for promoting EthereumMax on Instagram without disclosing she was paid $250,000 for the post.

Then

She paid the fine and agreed not to promote crypto securities for three years.

Now

The case set a US precedent that public figures must disclose payment for crypto promotions.

Why this matters now

It contrasts with the Argentine ruling, where a public figure's undisclosed promotion of a crashed token was found not to be a criminal offense.

Sources

(13)
+7
Al Jazeera BBC News AP News La Nación Perfil New Straits Times (AFP) MarketScreener (Reuters) O Globo TokenPost Poder Judicial de la Nación La Nación Perfil BBC News Mundo