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Hayden Davis, one of the alleged creators of the controversial crypto Libra, was accused of bragging about payments made to Karina Milei, sister and close advisor to Argentine President Javier Milei, in an explosive new development that has sent shockwaves across the South American nation’s political and financial circles. These allegations have emerged as part of a broader investigation into the president’s promotion of memecoin, which is now defunct.
Davis allegedly wrote text messages in December 2024 indicating that he wielded considerable power over President Milei, with financial ties to Milei’s wife, Karina. In those messages, Davis allegedly wrote,
“I send $$ to his sister, and he does everything I say and what I want.”
Several media outlets, including CoinDesk and El País allegedly examined these messages.
Denials and Counterclaims
Davis has denied wrongdoing in response to these accusations. He, through a spokesperson, said he did not remember sending any such messages and had no record of them on his device. He added,
“I never paid them anything, nor did they ask for anything. Their only worry was that proceeds from Libra would serve the people and economy of Argentina.”
CoinDesk also reported the statement.
The Libra Token Collapse
The controversy escalated in mid-February 2025 when President Milei heralded the Libra token on social media. The cryptocurrency he referred to as an instrument to provide support for small businesses across Argentina. However, in the months following his endorsement, the token’s value crashed by more than 90%, resulting in huge financial losses for investors. The speed with which this plunge has unfolded has been described by some financial analysts as a “rug pull,” a phrase that refers to a situation in which a cryptocurrency’s creators suddenly leave the project, taking investors’ money with them.
Impact on Politics and Law
The political consequences have been rapid. Some opposition leaders have called for him to be impeached, accusing President Milei of overseeing a fraudulent scheme that corrupts the integrity of his office. According to Reuters, a federal judge, María Romilda Servini, has been appointed to oversee the investigation into the case. The judiciary is looking to see if the president’s actions amount to fraud or other illegal acts.
Market Impact
The scandal also has had a real-world effect on Argentina’s financial markets. The country’s main stock index, the S&P Merval, plummeted nearly 4% after the controversy emerged. This decrease reflects investors’ concerns about the social and political upheaval that might ensue in the wake of the incident.
How President Milei Is Reacting
President Milei has spoken to the country, insisting that he engaged in no wrongdoing and that his promotion of the Libra token was only the work of a dreamer seeking new financial avenues for a beleaguered economy in Argentina. He said,
“I didn’t endorse that. What I did, so I spread the word,”
in an interview (translated) with Todo Noticias and reported on by CoinDesk. Notwithstanding these declarations, the president is now under increasing pressure from public opinion and political critics.
The Role of Karina Milei
A Líder Karina Milei tiene un lugar central en este proceso en desarrollo. Her position as a key advisor and member of the president’s inner circle, any verifiable proof of her complicity in unethical financial dealings would bring devastating consequences to the administration. So far, Karina Milei or her office has not publicly commented on the allegations.
Argentina’s Crypto-Political Storm Escalates as Investigation Unfolds
As the investigation advances, Argentina’s intertwined worlds of cryptocurrency and politics have come under intense scrutiny. The fate of this scandal could have far-reaching ramifications on the country’s ruling powers and their undertakings to digital assets.
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FAQs
1. What is the controversy over?
A leader’s sister is accused of bribery in the scandal over the crash of a digital currency promoted from the top.
2. Did the politician actually accept bribes?
The accused dares any payments, deriding political attacks. But leaked messages show he had influence over decisions, and that has sparked a probe into allegations of corruption.
3. How did the cryptocurrency go up in flames?
The token skyrocketed as a result of the lead endorsement but quickly fell down once dubious practices were unveiled, which caused huge losses for investors.
4. So how is this scandal going to turn out?
The fallout has ignited political instability, financial losses, a corruption probe, market slumps, and calls for impeachment against the country’s leadership.
Glossary of Key Terms
Memecoin: A cryptocurrency that is typically developed in jest or as a fad, though it can acquire genuine financial traction through speculation and online community hype.
Bribe (Bribery): Offering or receiving money or a favor in exchange for influence on a public official, which can lead to legal consequences and added charges of corruption in the court system.
Corruption Probe: A formal investigation into unethical or illegal behavior, typically one involving financial wrongdoing or the abuse of power within a government or institution.
Crypto Rug Pull: A scam in which developers hype a cryptocurrency, drive up its value, then sell their holdings, wiping out the rest of the market and other investors.
Market Manipulation: Illegal techniques to impact the financial markets, like pumping a cryptocurrency’s price, increasing it for personal profit, and then dumping it.
Political Endorsement: A public figure supports a product, company, or initiative, trying to influence public perception and, in turn, financial markets.
Investor Speculation: High-risk trading behavior involving purchases of assets based on predicted future value instead of the inherent state of financial stability.
Public Trust Crisis: A scenario in which the populace loses faith in those in power as a consequence of the corruption, scandals, and economic instability that often follow, resulting in demonstrations and political upheaval.
