April 7, 2026 — The New York Times published an investigative report that sent shockwaves through the crypto industry and global political circles. The report revealed that Argentine President Javier Milei made seven phone calls with Mauricio Novelli, a key figure behind the LIBRA token, on the night of its launch, February 14, 2025. The timing of these calls closely bracketed Milei’s promotional post on the X platform.
This revelation thrust a year-old crypto scandal back into the spotlight. What began as a "rug pull" scheme has since evolved into a defining event, testing the limits of political trust and industry regulation.
Why Presidential Endorsements Became the New Meme Coin Playbook
Over the past two years, the meme coin market has undergone a dramatic shift in strategy. In January 2025, former U.S. President Donald Trump’s TRUMP token soared to nearly $80 billion in market cap within two days, setting a new "presidential-level" ceiling for the meme sector. Less than a month later, Milei followed suit, aggressively promoting the LIBRA token on the X platform on February 14, 2025, claiming the project would support Argentina’s small and medium-sized businesses.
At its core, this model transforms politicians’ social media accounts into a new kind of "trust infrastructure." In a market rife with information asymmetry, public endorsements from national leaders are perceived by investors as a form of quasi-institutional credit guarantee. Yet, this trust anchor is exactly what project teams exploit most easily. After Milei’s tweet, LIBRA’s market cap skyrocketed to over $4 billion in just 30 minutes—only to crash by 85% within four hours, wiping out more than $4 billion in value. This "tweet-pump-dump-crash" cycle exposes the systemic manipulation risks inherent in celebrity-endorsed token launches.
From Tweets to Phone Calls: How Information Gaps Drive Market Manipulation
The investigation into Milei’s actions reveals a deeper issue: the mechanisms behind market manipulation are far more complex and covert than the public might imagine. According to The New York Times, forensic analysis of phone data shows that Milei and Novelli exchanged seven calls at various times around Milei’s promotional tweet. Investigators also uncovered what appear to be payment recordings and draft financial arrangements.
Earlier investigations had already pointed to a more concrete chain of interests. Argentine media outlet El Destape recovered a document from Novelli’s phone detailing a $5 million payment agreement. The deal was split into three parts: a $1.5 million advance; another $1.5 million contingent on Milei announcing Hayden Davis as his advisor on X; and a final $2 million tied to a blockchain government consulting contract signed by Milei and his sister. The document was created on February 11, 2025—three days before the promotional tweet.
On-chain data further corroborates evidence of insider activity. Eight wallets linked to the project seeded funds before the tweet and cashed out $107 million during the crash. Eighty-six percent of traders lost money on LIBRA, with total losses reaching about $251 million. When public information (the tweet) and private communications (calls, payment agreements) are systematically out of sync, the conditions for market manipulation are fully in place. This is not merely individual misconduct—it’s a proven, replicable playbook for extraction.
When a Head of State Is Involved: The True Cost of Political Trust
The structural fallout from the Milei-LIBRA scandal has gone beyond investor losses, triggering a crisis of political credibility in Argentina. On February 16, 2025—the day after the LIBRA collapse—opposition lawmakers filed a collective lawsuit against Milei, accusing him of violating the Public Morality Law and orchestrating a rug pull. By November, the Argentine Congressional Legislative Committee published a report concluding that Milei provided "critical collaboration" to the project and recommended further legislative review.
In March 2026, after the $5 million payment agreement came to light, opposition lawmakers pushed for impeachment again, citing the scandal’s international repercussions. While Argentina’s anti-corruption office had cleared Milei of ethical violations in June 2025—arguing the tweet was a "personal act" rather than an official one—this ruling’s credibility is now in question as new evidence emerges.
More concerning are the systemic responses at the institutional level. Shortly after a judge ordered the unsealing of Milei and his sister’s bank records, the Milei administration dissolved the special task force investigating the LIBRA scandal. This "investigation-unsealing-dissolution" sequence points to a structural reaction to crisis, not just individual ethics. On the Polymarket prediction platform, the probability of "Milei leaving office in 2025" jumped from 5% before the scandal to 20% after. A sitting head of state facing a political survival crisis due to a crypto project collapse is unprecedented on the global stage.
How the LIBRA Scandal Is Redrawing the Boundaries of Trust in Crypto
From an industry perspective, the LIBRA affair may be reshaping the very foundation of trust in crypto markets. On-chain data shows that after the LIBRA rug pull, liquidity on the Solana network plunged from about $12.1 billion to $8.29 billion, and the SOL price dropped by over 20%. Around 75,000 users were affected by the LIBRA flash crash, with total losses of about $286 million—over 86% of all traders lost money.
This crisis of market trust could accelerate two industry shifts. First, investors will become far more cautious about "celebrity endorsements." When a president’s token can complete a "pump-dump-crash" cycle in mere hours, the market will be forced to rethink how it values celebrity coins. Second, regulatory intervention is likely to intensify. In February 2025, an Argentine law firm filed criminal complaints with the U.S. Department of Justice and the FBI, alleging LIBRA’s team committed cross-border securities fraud. If the U.S. Securities and Exchange Commission (SEC) investigates insider trading and confirms Milei’s involvement, extradition discussions could even be triggered.
From Argentina to the World: Three Scenarios for Political Endorsement Risk
Based on current investigations and industry dynamics, there are three main scenarios for how the Milei-LIBRA scandal could unfold.
Scenario 1: Escalated investigations and international regulatory coordination. The extent of U.S. regulatory involvement will be decisive. If the SEC or DOJ classifies LIBRA as securities fraud, it could spark a sweeping review of cross-border celebrity-endorsed token launches. Already, political meme coin launches were highlighted in Forbes’ 2025 roundup of the year’s top five crypto controversies, signaling growing regulatory attention.
Scenario 2: Political reckoning and institutional reform. Domestically, Milei faces both impeachment and judicial investigation. Even if he remains in office, the scandal may force Argentina to introduce clear rules governing public officials’ involvement in crypto projects. Should such legislation take the lead, other Latin American countries may follow, creating a regional regulatory ripple effect.
Scenario 3: Industry self-regulation and standard setting. From a market perspective, the meme coin sector may need a major shakeout. Some industry observers suggest the LIBRA scandal could be a "cooling-off period" that helps the market focus on genuinely valuable projects. However, the speed and depth of self-regulation will depend on improvements in investor education, exchange risk controls, and information disclosure.
From Isolated Case to Systemic Risk: Three Blind Spots That Remain
Despite the LIBRA scandal exposing many issues with politically endorsed tokens, three key risks may still be underestimated.
First, the challenge of evidence integrity and accountability. The current evidence—seven call records, a $5 million payment agreement, and phone forensics—may not be conclusive in court. Milei continues to deny wrongdoing, and investigators have yet to confirm the content of the calls. Without direct proof that the president knew about and participated in the cash-out plan, the legal threshold for criminal liability remains high.
Second, the replicability of the model and regulatory blind spots across borders. LIBRA is not unique. From MELANIA to TRUMP to this scandal, the "celebrity endorsement—social media hype—insider cash-out—project collapse" cycle has been repeated. These schemes often exploit gaps between jurisdictions: promoted in Argentina, issued on the Solana blockchain, traded on offshore exchanges—making cross-border enforcement extremely difficult.
Third, the persistent information gap. Even if LIBRA serves as a cautionary tale, similar schemes may surface in the future. Politicians’ social media accounts have unrivaled reach, while ordinary investors remain at a significant disadvantage in accessing timely information. As long as this asymmetry exists, the inherent risks of politically endorsed tokens will not disappear.
Conclusion
The LIBRA scandal has evolved from a simple "rug pull" to a watershed moment for Argentina’s political system and the global crypto industry’s trust mechanisms. The exposure of seven phone calls and a payment agreement has shifted presidential endorsements from "market narrative" to "investigative evidence." For the crypto sector, the core challenge is now clear: when the trust anchor—public endorsements by political figures—can itself be systematically manipulated, market participants need a more reliable foundation for trust. Strengthening regulatory frameworks, increasing on-chain transparency, and boosting investor risk awareness may be the three most important priorities to emerge from this crisis.
Frequently Asked Questions (FAQ)
Q: What happened after the LIBRA token was launched?
A: On February 14, 2025, Argentine President Milei promoted the LIBRA token on the X platform. The token price soared, with market cap briefly exceeding $4 billion. Soon after, wallets linked to the project withdrew large amounts of liquidity and sold off tokens, cashing out around $107 million. This caused the token price to plummet by over 90%, resulting in heavy investor losses.
Q: What new evidence did The New York Times reveal?
A: According to The New York Times, investigators found phone records showing seven calls between Milei and project figure Novelli on the night LIBRA launched, spanning the period before and after the promotional post. Forensic analysis also uncovered suspected payment recordings and draft financial documents.
Q: What legal consequences is Milei currently facing?
A: Milei faces collective lawsuits in Argentina for promoting the LIBRA token, with opposition lawmakers repeatedly pushing for impeachment. A federal investigation has listed Milei as a "person of interest." In the U.S., law firms have filed criminal complaints with the Department of Justice and FBI, alleging the LIBRA team committed cross-border securities fraud.
Q: What are the long-term impacts of the LIBRA scandal on the crypto industry?
A: The scandal may significantly erode investor trust in celebrity-endorsed tokens and prompt regulators worldwide to scrutinize similar issuance models more closely. Since the LIBRA incident, Solana’s on-chain liquidity has dropped sharply, and overall meme coin activity has declined.
Q: How can investors identify risks in politically endorsed tokens?
A: Investors should look for: a publicly available technical white paper and compliance guarantees; transparent team identities; on-chain liquidity pools without abnormal lock-up mechanisms; warning signs of rapid "tweet-pump-dump" cycles; and whether the project team operates across multiple jurisdictions to evade regulation.
