- $LIBRA skyrocketed after Milei’s endorsement, only to crash 95% within hours.
- Blockchain analysts exposed insider trading and a massive liquidity drain scheme.
- The $LIBRA debacle highlights the dangers of political crypto endorsements.
Argentina’s $LIBRA memecoin saw a meteoric rise after President Javier Milei endorsed it, hitting a $4.5 billion market cap. But within hours, its value plummeted 95%, shocking investors. On-chain data revealed insider trading and liquidity manipulation, exposing a classic pump-and-dump scheme. This incident raises serious concerns about political figures promoting cryptocurrencies.
The Rise and Sudden Fall of $LIBRA
Milei backed $LIBRA on X, claiming it would support Argentina’s economy. The endorsement fueled a massive buying wave, pushing the token to an all-time high of $4.56. However, reports soon emerged that a few wallets held 82% of the supply.
Blockchain experts discovered that the developers pulled $87 million from liquidity pools, triggering an avalanche of sell-offs. Within hours, $LIBRA collapsed to just $0.19, wiping out billions in value. Retail investors were the biggest losers, with some losing millions in minutes.
Insider Trading and Manipulation Uncovered
Blockchain investigators found three wallets that made strategic buys right after Milei’s tweet. These wallets withdrew funds from exchanges before the promotion, suggesting a well-planned strategy. The traders behind them profited over $20 million by selling at peak prices.
Analysis by blockchain firm Bubblemap revealed that the developers swapped Solana and USDC in the liquidity pool for $LIBRA tokens. This artificially boosted prices, making it seem like a strong rally.
Milei’s Response and Community Backlash
As the backlash grew, Milei deleted his tweet and distanced himself from $LIBRA. He later claimed he had no prior knowledge of the project’s structure. However, investors and crypto experts were already questioning the legitimacy of political-backed tokens.
The $LIBRA disaster is a stark warning about the risks of political endorsements in crypto. To avoid costly losses, investors must do thorough research before chasing hyped-up tokens.
