On February 19, blockchain researchers reported that approximately $99 million worth of cryptocurrency was withdrawn from the marketplace of a coin at the center of a scandal in Argentina. This withdrawal was executed by eight digital wallets linked to the crypto token's creator.
Argentinian President Javier Milei came under scrutiny after he recommended the little-known crypto coin $LIBRA in a post on X, which was later deleted. Despite his denial of any connection to the cryptocurrency, a federal judge is investigating the token's launch and Milei's involvement. The coin, promoted by Milei, experienced a significant value surge above $4.50 before plummeting within hours.
President Milei has accused his political opponents of exploiting the situation. Blockchain researchers from Chainalysis have confirmed that eight crypto wallets withdrew around $99 million worth of tokens from the $LIBRA token's liquidity pool, a type of crypto marketplace for trading.
Chainalysis found that these addresses likely belong to the Libra creator team, as they were directly funded by the Libra token creator. However, they did not specify the timing of the fund withdrawals. Meanwhile, another blockchain analytics firm, Nansen, revealed that the wallets still retain a combined value of approximately $87 million.
Nansen indicated that there remains a substantial amount of money held by those connected to the Libra launch. The value of these holdings could fluctuate with the changing prices of the cryptocurrencies they are stored in.
Meme coins, including $LIBRA, are crypto tokens inspired by memes or internet trends. Although they frequently experience rapid value increases followed by crashes, it is uncommon for them to involve political figures. In a surprising move, former U.S. President Donald Trump and his wife launched their own token last month.
The tokens withdrawn from Libra's liquidity pool included the stablecoin USDC and another cryptocurrency called SOL, or Solana. The value of these funds in dollars varies as token prices change. The token was launched on a crypto exchange named Meteora, which could not be reached for comment.
Hayden Davis, previously listed as the CEO of Kelsier Ventures on LinkedIn, described himself as a launch advisor for the token. In a statement on the company's X account, Davis claimed he controlled up to $100 million from the Libra marketplace, with plans to reinvest it into the token.
In an interview with crypto YouTuber Stephen Findeisen, also known as Coffeezilla, Davis asserted that the token was not a "rug-pull" scam. Instead, he described it as a plan that went wrong, leaving him as the custodian of $100 million.
Despite attempts to contact Davis for further comments, Reuters was unable to reach him, and his spokesperson did not respond to inquiries.
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Reporting by Elizabeth Howcroft in Paris and Hannah Lang in New York; Additional reporting by Lucinda Elliott in Uruguay; Editing by Tommy Reggiori Wilkes and Stephen Coates
