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Argentina's judiciary has taken a significant step in the ongoing investigation into the collapsed Libra token scandal by ordering a freeze on the assets of key figures involved. This move targets US promoter Hayden Davis and two alleged intermediaries, Orlando Rodolfo Mellino and Favio Camilo Rodríguez Blanco, aiming to prevent the dissipation of funds potentially linked to a fraud estimated between $100 million and $120 million. The National Securities Commission has been directed to notify all virtual asset service providers to extend the freeze to local crypto platforms.
Key Takeaways
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Argentina has frozen assets of individuals linked to the Libra token scandal.
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The investigation targets a potential fraud of $100-$120 million.
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The freeze extends to digital wallets, bank accounts, and real estate.
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The Libra token surged and crashed after a brief promotion by President Javier Milei.
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This action is a rare instance of cross-continental judicial coordination in crypto asset cases.
The Libra Token Scandal Unfolds
The Libra token scandal erupted in February when Argentine President Javier Milei briefly endorsed Hayden Davis, a promoter of meme-based tokens, as a blockchain and AI advisor. Following this endorsement, the Libra token experienced a rapid surge in value, only to crash shortly after, resulting in losses of approximately $250 million for over 40,000 retail investors. Davis is considered the central figure in this alleged memecoin scheme.
International Legal Actions
This development in Argentina follows a similar action in the United States, where a New York judge previously froze $57 million in USDC stablecoins linked to Davis and his associates at the now-defunct Meteora exchange. Although that freeze was later lifted, the lawsuit, brought by American and Latin-American investors, accuses Davis, former Meteora CEO Ben Chow, and others of orchestrating a "rug pull." Plaintiffs have invoked the RICO Act, alleging that Libra and another Davis project, M3M3, were part of a pattern of organized fraud.
Political and Cross-Border Implications
The investigation has drawn significant attention due to alleged connections between Davis's crypto transactions and high-level political meetings in Argentina. Court filings suggest that intermediaries converted tokens to cash during Davis's meetings with President Milei at the Casa Rosada, fueling the "Cryptogate" controversy. While President Milei faces no criminal charges, the coordinated asset freezes in Buenos Aires and New York highlight the increasing complexity of cross-border crypto investigations, where regulatory enforcement intersects with political entanglements. Despite the scandal's proximity to his administration, Milei's party recently won midterm elections, positioning him for a potential presidential run in 2027.
Sources
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