Argentina’s $4.6 Billion Crypto Scandal: A President’s Debacle and Historic Theft

Argentina’s crypto scandal involves President Milei promoting the LIBRA token, which led to substantial investor losses and legal actions against him. Simultaneously, Bybit, a major crypto exchange, experienced a $1.5 billion theft by hackers, adding to the turmoil in the crypto sector.

Argentina’s President Javier Milei is facing severe repercussions following his promotion of the LIBRA cryptocurrency, which he claimed could bolster the nation’s economy. Posting on X, he encouraged investment in the token, which surged to nearly $5 before plummeting to under $1 shortly thereafter. This action has provoked over 100 fraud complaints led by opposition figure Claudio Lozano, and a formal investigation has been initiated by Argentine authorities.

Crypto entrepreneur Hayden Davis has acknowledged his involvement in the LIBRA launch, revealing that he profited significantly through a controversial method known as sniping. This technique, characterized by buying newly launched tokens at low prices to inflate market value before reselling, resembles illegal front-running in regulated markets. Davis’s admissions have raised ethical concerns about the token’s release, straining Milei’s reputation as he defends his leadership.

The extent of financial losses following the LIBRA fiasco is staggering, with approximately 86% of traders incurring losses totaling $251 million. Conversely, a small number of investors reaped significant profits, amounting to $180 million. The turmoil has led to the resignation of Ben Chow, co-founder of the decentralized exchange Meteora, which played a key role in the release of both LIBRA and other tokens.

In a separate incident, the crypto exchange Bybit suffered the largest theft in cryptocurrency history, amounting to $1.5 billion, attributed to hackers believed to be affiliated with North Korea. The stolen assets, primarily ether, were quickly funneled across various wallets. Bybit’s CEO Ben Zhou has reassured customers of the exchange’s stability, asserting that all client funds are secure and that the company can absorb the loss.

In summary, Argentina’s LIBRA crypto debacle reflects grave issues surrounding the responsible promotion of digital assets, leading to extensive financial losses for investors and legal scrutiny for President Milei. Simultaneously, the Bybit exchange’s significant hacking incident underscores the vulnerabilities within the cryptocurrency market. Both situations highlight the pressing need for greater regulation and transparency in the rapidly evolving crypto landscape.

Original Source: www.forbes.com