LIBRA: Imbalanced Confidence
The backstory to Javier Milei shilling a pump & dump and potential implications
Welcome Avatar! It seems Milei got a bit bored with the country’s newfound stability, introducing some volatility into the Argentina trade this weekend by promoting a pump & dump coin through his social media accounts. Let’s discuss the implications of this, and precedents, since it is not his first rodeo.
On Friday night, just a few hours after market close, Javier Milei posted the following on his X and Instagram accounts:
Initially, many bigger X accounts that openly support Milei started giving thumbs up and reposting his Libra “project”. Right after that, there was moment of eery silence, since Milei didn’t expand on the project and just left it as a pinned post on his profile.
Suddenly, multiple hacked grey check accounts started promoting their own shitcoins on Solana, like a hacked Alagoas government (State in Brazil) account under the name of the Prime Minister of Bermuda (now deleted), and this account that clearly didn’t belong to Ecuadorian president Naboa but also had a grey check and was shilling tokens.
This activity initially led me to believe that Milei could be dealing with a hacked account, although it seemed suspicious that they would also hack his Instagram account, unless of course, the hacker got hold of his device somehow or he uses the same login credentials for both.
The website he referenced in his post was very poorly done, had a Gmail contact address and was tied to a Panamanian company.
Hope is the last to die, but deep down inside most locals familiar with Milei’s past feared the worst: that it was a real endorsement by Milei.
Enter CoinEx.
CoinEx
At the tail end of 2021, Javier Milei posted the following on his Instagram (post is still there):
I had the pleasure of visiting the offices of @coinx.world and its team.
They are revolutionizing the way of investing to help Argentines escape inflation. You can now simulate your investment in pesos, dollars or cryptocurrencies and make a profit.
Write to them @coinx.world on my behalf so they can advise you with the best!
Just a few weeks later, CoinX came crumbling down and had to shut down its operations, rugging duped investors in the process, who lost everything.
In this interview from 2021, when questioning Milei about this promoted post on the gram, the following exchange unfolds:
Journalist: “You said on your Instagram that these guys were revolutionizing the way of investing to help Argentines escape inflation, write to him on my behalf. And you were already a deputy on December 18.”
Milei: “Back then, the business had a certain characteristic. And it was a way that made you, if you want, skip the Central Bank regulation to have a higher return was made leveraged on public securities in dollars…”
Journalist: “Okay, but is it a post that you made on your recommendation or is it an advertising exchange? Didn't they pay you for that?”
Milei: “…well, I charge for my opinions, of course I charge for my opinions.”
Journalist: “So you wouldn't apologize to those who feel scammed?”
Milei: “No, hold up, because they weren't scammed.”
After this, Milei tries to explain the inner workings of CoinX, but from his response it is obvious that he did not really understand them.
Because if he had, it would be instantly clear to him that CoinX promised mega high yields that would simply be impossible unless you were dealing with a classical pyramid built by Ponzi bros.
No way anyone can come up with a legit strategy at those returns, Javo. Not even Madoff tried to sell 8% fixed monthly.
In 2022, the National Securities Commission (CNV) ordered the CoinX platform to cease its investment advisory activity. A year later in 2023, the company was reported for alleged fraud. Federal Police raided 23 offices and addresses of the firm by court order in the City and Province of Buenos Aires and in the capital of Santa Fe. Four arrests were made.
In January of this year, the name of CoinX popped up again when Francisco José Hauque, one of the owners of the firm, was arrested along with his wife with two kilos of cocaine and a gun inside a high-end car.
The police acted when they saw that Huaque was beating his wife inside the car on a street in Buenos Aires. When the police intervened, the couple wanted to leave, which raised suspicions and they called for a search.
Hauque already had an open case for alleged fraud with his cryptocurrency companies CoinX and Qpons (how anyone can put money in something called “Qpons” is a mystery).
So with that paid promotion by Milei in mind for these fine citizens, let’s go over what happened yesterday.
The Libra Dump
In Bribes, Insiders and a Manipulated President, Diogenes Casares gives a good on the ground overview of what likely happened in the inner circles of the Milei government around the LIBRA token:
[…] I had started to receive messages from friends regarding a rumor that a Milei focused memecoin was starting. Initially, I lightly asked a few people associated with the government, who confirmed nothing of the sort was happening.
[…] This push became more aggressive as I was told that someone close to Milei had received a bribe of $5M to put it in front of him. To be clear, this DOES NOT mean that Milei received money, but rather someone close to him had received money to facilitate Milei promoting the token.
The high-up nature of this person, and the quality of the source (though I cannot fully verify it myself to be clear) made me very concerned, and made me push more.
Right after the LIBRA launch, it became apparent that some of wallets were linked to the same individuals behind previous memecoins like MELANIA, the coin that gave the starting sign for the market to dump Trump’s coin as well.
Unfortunately, LIBRA was set up even less favorably in terms of tokenization, allowing for a classic pump and dump. More than 85% of the Libra tokens were held by just a handful of wallets.
After LIBRA reached a market cap of over $4 billion dollars, the team doing the rugging made approximately $107-110 million dollars by selling off their tokens and removing liquidity, making it one of the biggest memecoin rug pulls in crypto history:
The chart is a school example of a P&D, executed in a record time with a record amount of memecoin investors participating (mainly from outside Argentina):
As mentioned before, the website was very improvised to say the least, but another interesting detail was that the LIBRA coin launch and the website launch happened just moments before Milei’s social media posts:
This suggests that Milei was very much in sync with the LIBRA team to time his social media endorsement for maximum effect. Within 3 hours of the launch, insiders began cashing out — the timeline on the LIBRA chart above is insane.
Besides cashing out approximately $87.4 million within the first 3 hours, insiders were adding one-sided liquidity pools on Meteora with only LIBRA tokens.
This means that they were removing USDC and SOL, and used these liquidity pools instead of selling on the market. LIBRA dropped like a stone as the $87.4M in sales absorbed all buy pressure at the top.
Milei’s Defense
After these dramatic events unfolded on a Valentine’s Day to remember, Milei was nowhere to be seen. His shill tweet was still pinned to the top of his profile — going on 6 hours—, and no government official had given any statements or confirmations whatsoever.
Finally, speculation about his account being hacked was put to rest, when he retracted his previous post in a new tweet, confirming that he had in fact endorsed LIBRA:
A few hours ago I posted a tweet, like so many other countless times, supporting a supposed private project to which I obviously have no connection.
I was not aware of the details of the project and after having become aware of it I decided not to continue spreading it (that is why I have deleted the tweet).
To the filthy rats of the political caste who want to take advantage of this situation to do harm, I want to say that every day they confirm how vile politicians are, and they increase our conviction to kick their asses out.
The fact that Milei tries to blame this on the Kukas or the “political caste” infiltrating and setting him up for a trap, underscores the lack of personal responsibility which is such a chronic and endemic disease in Argentina’s political class.
As with all rug pulls, if Milei hadn't posted it on his personal accounts, the volume would have been close to zero. Therefore he was a necessary and essential participant in a scam that reached 4.4 billion dollars in market cap, and where some of the main wallets walked away with north of 110 million at least.
Even though most of his followers applauded his admission of “not understanding” the exact thing he was promoting, he never apologized and instead attacked the opposition for framing him. Personal responsibility has left the building.
And no, the reasoning that Milei launching a coin is all okay just because Trump launched a memecoin doesn’t hold ground: Trump knowingly did this a few hours before he was sitting in the Oval Office, which would make the money grab less problematic compared to if he had promoted it while already in office — which doesn’t make it any less disturbing by the way.
And as we will see below, the lack of Milei’s connection to the project could be questioned, or at least there is a group of people close to Milei who are very much connect to this project and have likely benefitted from it.
KIP & Hayden
Back to Libra and finding out who were the ones behind it, and more importantly: who let these scammers get close to Milei?
Julian Peh, CEO of KIP Protocol, met Milei at a tech forum in Buenos Aires in October last year.
They have been in contact since, and two week ago, Milei posted the following encounter with a supposed “blockchain entrepreneur” called Hayden Mark Davis, who is literally a ghost online and no one in the crypto space has ever heard of:
Right after the rug pull on LIBRA was complete, KIP Protocol came out with the following statement, 2 minutes before Milei came out with his post where he retracted his endorsement, potentially showing some coordination for who would take the blame here:
Today was the launch of the ambitious Viva la Libertad project to help private enterprises in Argentina, and the $LIBRA currency has been a success. We want to thank everyone for their trust and support.
To address all questions: we would like to clarify that this is a private enterprise project, President Milei was not and is not involved in the development of this project, as he has mentioned himself.
This is an entirely private enterprise. Thank you for being part of this great beginning!
— Source
This reads like the kind of text a legal team would send for KIP to copy paste, especially the confirmation regarding Milei had nothing to do with this, and then Milei tweeting the same thing 2 minutes later.
But it gets better. Apparently the heat for taking the blame on this was getting a bit too much for KIP, so they decided to come out with another statement a few hours later:
There has been a lot of misinformation surrounding the $LIBRA launch and KIP’s role. To clarify: The token launch and market making were fully handled by @KelsierVentures, represented by Hayden Davis, the initiators of the project. None of the wallets belonged to KIP or myself.
[…]
After discussions with Kelsier, we have been informed of the following steps:
• All SOL from today’s launch will be re-injected into the LP/chart.
• All market-making fees will go to a foundation in Argentina.
• The foundation will continue running the program as originally planned All details regarding the tokens should be directed to Kelsier.
We did not profit a single cent from today's activity.
Lol. It seems a lot of back and forth between “Kelsier Ventures” and KIP have been going on in the background today to see how to best spin the narrative, which brings us back to our unknown crypto soldier Hayden next to Milei in the photo above.
Hayden finally put a face to the name in a video statement tonight, taking the responsibility for the token launch. No doubt he was forced to published this, after the Kelsier Ventures X account had been locked since right after the rug pull and his account had shown no activity after his post on the meeting with Milei on January 30.
In his statement, Hayden confirms that he knows there’s “tons of frustrations” and that he’s had “tons of crazy text messages” on his phone, but that he is “here to set the record straight”. He continues:
“I want to just shed a little bit more light and let you guys at least see my face, because a lot of people that have been involved with this launch have gone either silent or are nowhere to be found.
[…]
I am indeed Javier Milei’s advisor. Obviously, I think most of you guys have seen that either on Twitter or some form of social media.
I am working with him and his team on much bigger tokenization and really cool stuff in Argentina and I absolutely back him.
What happened with Libra, I think there's many things I could say. There's only certain elements that I could control the launch. Definitely things didn't go according to plan.
No shit.
His written statement below the video contains some interesting details that are worth highlighting:
So basically Hayden was in charge of the liquidity part, which we saw before was completely drained in terms of pairs, which caused the LIBRA price to crash. One little detail in this paragraph is worth highlighting: “I do not feel comfortable transferring them to Milei’s associates or the KIP team.”
Who are Milei’s associates here? This is a question tied to the $5 million bribe mentioned earlier that will likely be doing the rounds on X for the upcoming days.
Trust Issues
After seeing Hayden’s explainer video, there are many red flags —especially given the context of the crypto space— that would make one think twice about granting him access to Milei, much less having him on as an advisor.
Checks and balances appear to be missing when it comes to who gets a meeting with Milei at the Casa Rosada if folks like Julian Peh from KIP Protocol and Hayden Davis were allowed to get close to him.
Argentina is one of the few countries with a very rich community of Bitcoiners and less scammy/real world crypto builders. The country also abounds in Ponzi bros and scam artists, who occasionally end up in a suitcase.
For some reason this is the second time that Milei chooses to associate himself with lesser known scammers, this time from abroad.
Milei met with these dubious characters Julian and Hayden on multiple occasions, and minutes after launching the very precarious website and shitcoin, promoted Libra as if it were something inherent to his presidency / Argentina on all his networks.
He left the pinned tweet up for 5+ HOURS.
By doing so, Milei generated a volume that only he could have achieved because of who he is and his following, with the inevitable pump and dump that followed due to the coin’s tokenomics and insider wallet distribution.
Conclusion
Through his posts on social media, Milei just handed the Peronist opposition a nuclear bomb on a silver platter. I am no criminal lawyer, but it is safe to say that the impeachment charges will start flying in, like this one by Kirchnerists lodged a few hours after Libra’s dump on —mostly foreign— retail.
If these accusations get anywhere is anyone’s guess —if Argentina’s past is any indicator, my bet would be that this won’t having any implications for Milei’s presidency locally, just like with so many politicians before him—, but they will be an unnecessary additional distraction next to more crucial topics like Argentina’s economy and Milei’s political success in the October elections.
The more important damage is that to Milei’s image abroad, since most people outside of Argentina were probably not aware of his previous endorsement or simply forgot about it because the chainsaw was roaring with such great success. The fact that nobody on the Milei team thought about the potential consequences of his actions or simply didn’t care, is worrying to say the least.
His political team will have to think long and hard on how to avoid these things from happening in the future, and Milei would do well to focus solely on the matters at hand, which is the October elections and the Argentine economy.
Most of Milei’s online followers appear to have already waved off his tweets as a nothing burger, since everyone is terrified of the alternative: the return of Kirchnerism. Unhealthy amounts of copium has been flying around today with argumentation in the trend of “well, at least it was mainly crypto bros abroad that got rekt, not local Argies; if you invest in something like that you know the risks; this is a good lesson for those get rich quick dudes.”
They are clearly missing the forest for the trees. The reputational damage is done, and getting back the trust from Tradfi bros with heavy pockets ready to invest in what they now see as an even riskier investment, will be key. The scales of trust have definitely tilted, only time will tell if the balance returns after Libra.
Natural resource investments under the RIGI scheme are unlikely to be at risk, but any investment that is indirectly tied to a government decision will be subject to even more thorough due diligence after what happened today.
Milei would do well to lower his arrogance, seek proper advice from competent people, withhold from promoting private projects while in office and improve his security and advisors. Some heads will have to roll for what happened.
Confidence is one of the hardest things to gain and one of the easiest to lose, even more so in the case of Argentina given the country’s rich history of investor rug pulls in virtually all sectors of the economy.
Perhaps I am exaggerating a bit here, and this LIBRA story turns out to be a “nothing ever happens” event, since so many things in this world of financial nihilism we inhabit seem to end up. I agree with this framing:
I think this is a sad story, but it is also an enormous opportunity for the president to cull whoever was feeding this clearly ill advised and potentially corrupt idea to him and to once again as he has so many times in the past prove that he is a different kind of politician that can take Argentina out of decades of economic decadence and stagnation, and not simply creating a new corrupt casta.
Another silver lining is that the world currently has the attention span of a doorknob, and this whole episode could potentially slip into oblivion relatively quickly — similar to how no one mentions Trumps memecoin after one week.
That is all for now, it has been a long 24 hours and this rodent is exhausted.
See you in the Jungle, anon.
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As a futbol mad country, I imagine the own goal analogy is getting some good use down there right now.
What a frustrating unforced error. Year one was a triumph. I hope he can quickly get back on track.