- Congress launches official investigation into LIBRA token crash after $280M in losses.
- Lawmakers summon top officials over possible misconduct and insider involvement.
- Investigations reveal LIBRA creators retained 85% of tokens before its market collapse.
The Chamber of Deputies of Argentina announced a full investigation into the case with the LIBRA token. Lawmakers approved the decision to establish a commission to investigate the launch of the token, its collapse and the involvement of politicians. The resolution was approved with 128 votes, which proves the fact that the legislature supports oversight.
The token, endorsed by President Javier Milei, surged to unprecedented high levels on the 14th of February. In a few hours it rose over 3,000% before falling by 90%. This collapse cost them more than $280 million and impacted over 75,000 Argentine investors.
Lawmakers Approve Probes and Testimonies
In the special session on April 8, Congress passed three main resolutions. First, they formed a commission to handle the case. Second, they call for the interrogation of high-ranking officials. Third, they demanded paperwork to be produced by the executive arm.
Some of the officials summoned are Economy Minister Luis Caputo, Chief of Staff Guillermo Francos and Justice Minister Mariano Cúneo Libarona. National Securities Commission head Roberto Silva was also involved. The purpose of lawmakers is to identify whether the promotion of the government into LIBRA led to investors incurring losses.
However, this position received a lot of support but was also opposed on party grounds. Members of La Libertad Avanza, the governing party, claimed that the opposition was overstaging. On the other hand, the leaders of the opposition specified that it is the congress’ responsibility to give the people the answers.
Legal and Financial Fallout Deepens
Further investigations pointed out that there is the possibility of insider trading in relation to LIBRA’s liquidity. Kelsier Ventures, Meteora, and KIP Protocol are also said to have held 85% of the tokens before the launch. These entities are said to have drained liquidity, making profits of over $110 million.
Haydone Davis who is the founder of Kelsier Ventures was established as the key figure. A formal request was made to Interpol to arrest him. In the United States, Burwick Law filed a class-action lawsuit against Davis and associated firms on the 18th of March. The category of the case involves deception and financial fraud against them.
Initially, President Milei considered it a private initiative that would help to foster the Argentinian economy. He posted a tweet that led to the increase in the price of LIBRA but deleted the tweet after the crash had happened. He then denied any knowledge of its structure or its financial model.
Broader Implications for Crypto and Governance
Various congress members have expressed concern about the political and economic repercussions of the scandal. Some called for legislative measures to increase accountability for the safeguard of Argentina’s financial wealth while others against the disregard of judicial authority and power.
The “Cryptogate” scandal has resulted in doubts concerning the government’s involvement in unregulated digital assets. The lawmakers claimed that transparency is important, especially taking into account the ongoing national and international investigations.
Some of the duties of the commission include monitoring movement of tokens, establishing losses incurred by investors and investigate involvement of executives. Congress expects to release its findings before Argentina holds its midterm elections.
