Libra cryptocurrency promoted by Javier Milei leads to financial losses for investors
The recent collapse of the Solana-based memecoin $LIBRA has sent shockwaves through the cryptocurrency world. Within hours, the token’s market capitalization plummeted from $4.5 billion to just $200 million, leaving investors in a state of disbelief and provoking questions about the token’s credibility. One prominent individual caught in the $LIBRA disaster was Dave Portnoy, the founder of Barstool Sports. Portnoy initially invested in $LIBRA but eventually chose to return 6 million tokens due to concerns raised by his advisor Hayden Davis regarding the disclosure of receiving tokens as a gift.
Portnoy expressed his discomfort with the situation, stating, “I’m not going to tweet about this launch and act like it’s just, ‘Oh, Milei is the best’…and not mention that they gave me coins.” The $LIBRA token was initially promoted on Javier Milei’s official account, raising immediate red flags about potential insider manipulation and the token’s economic claims. The project’s website, registered hastily before the launch, lacked transparency and only provided a simple Google Form for funding applications.
Within three hours of the launch, on-chain analytics firm Bubblemaps revealed that a small group of insiders had cashed out $87.4 million, with a significant portion of the token’s supply concentrated in a single cluster. This discovery heightened suspicions of market manipulation, as large holders allegedly exploited liquidity pools on Meteora to profit while retail investors suffered losses. The project suffered a severe blow when Argentine President Javier Milei withdrew his support, causing a mass sell-off that drastically reduced the token’s market cap from $4.5 billion to $500 million.
Davis defended himself publicly, stating that he did not personally benefit from the funds and planned to use the raised money to buy back and burn tokens to stabilize the cryptocurrency’s value. He proposed reinvesting up to $100 million to repurchase and destroy tokens. Milei’s withdrawal of support sparked outrage in Argentina, leading to calls for his impeachment, with some labeling the incident an “unprecedented scandal.”
The $LIBRA debacle underscores the risks associated with investing in memecoins and exposes the potential for market manipulation. The involvement of figures like Milei and Portnoy sheds light on the need for increased transparency and accountability in the cryptocurrency market. This cautionary tale serves as a reminder to exercise caution and diligence when navigating the volatile world of cryptocurrency.
