The U.S. Department of Justice (DOJ) has opened an investigation into the rise and collapse of the $LIBRA memecoin, which is now being labeled as one of the biggest crypto scams in recent history. Investors are estimated to have lost between $87 million and $107 million, and authorities are assessing whether criminal charges should be filed. The case is currently under review by the DOJ’s Fraud Section, which is analyzing early evidence related to the token’s rapid surge and sudden crash.
The downfall of $LIBRA has rattled the cryptocurrency market, leaving thousands of investors across Argentina, the U.S., and other countries with substantial financial losses. The investigation has also extended to major crypto platforms such as KIP Protocol, Jupiter, and Meteora, which were involved in the token’s trading and liquidity. Authorities are now scrutinizing some key executives for their role in the launch and promotion of the memecoin. Central figures in this scandal include American entrepreneur Hayden Davis, CEO of Kelsier Ventures, and Argentine President Javier Milei.
The Role Played by President Milei, Hayden Davis and Others
On February 14, 2025, Kelsier Ventures, under Davis’s leadership, introduced the $LIBRA token as part of the “Viva La Libertad” project. Shortly thereafter, President Milei publicly endorsed the cryptocurrency, leading to a rapid surge in its value. However, within hours, the token’s price plummeted, resulting in significant financial losses for approximately 74,000 investors. Investigations suggest that the creators retained 70% of the token supply and liquidated their holdings at peak value, a maneuver characteristic of a “rug pull” scam.
Davis and Kelsier Ventures, are now under DOJ investigation alongside several international associates, including Julian Peh (Singapore), Mauricio Novelli (Argentina), and Manuel Terrones Godoy (Argentina/Spain).
The controversy has also ensnared Argentine President Javier Milei for his part in publicly endorsing $LIBRA on social media. Milei had described the token as a private initiative supporting small businesses in Argentina, but as the token’s value plummeted by over 90%, he quickly distanced himself. The fallout has resulted in legal complaints and calls for his impeachment from political opponents, who argue that his involvement misled the public into investing in a scam.
Meanwhile, Davis has gone into hiding in Texas, hiring private security after allegedly receiving threats. Before disappearing, he made startling admissions in interviews with YouTuber Coffeezilla, revealing that he manipulated $LIBRA’s price, provided insider information, and retained investor funds..
Davis operates Kelsier Ventures alongside his brother Gideon Davis and father Charles Thomas Davis, the latter of whom has a history of fraud and federal prison time before entering the crypto industry.
Further complicating the matter, leaked communications reveal that Davis boasted about influencing President Milei through his sister, Karina Milei. Davis allegedly claimed to have secured favorable actions from the president by making payments to Karina, though concrete evidence supporting these bribery allegations remains undisclosed.
The $LIBRA debacle has intensified scrutiny of cryptocurrencies promoted by political figures. Similar ventures, such as tokens associated with the U.S. President Donald Trump and Central African Republic President Faustin-Archange Touadera, have Continued to face criticism due to their volatile nature and potential for fraud.
Quick Facts:
- The U.S. Department of Justice is probing the $LIBRA cryptocurrency collapse, which led to investor losses estimated at $100 million.
- Hayden Davis, CEO of Kelsier Ventures, and Argentine President Javier Milei are central to the investigation.
- Accusations include a “rug pull” scam and potential bribery involving President Milei’s sister, Karina Milei.
- The scandal raises concerns about the legitimacy of politically endorsed cryptocurrencies and the need for regulatory measures.
