In what is being called the most significant cryptocurrency scandal since the FTX collapse in 2022, 28-year-old Hayden Davis has found himself at the center of controversy, alongside Argentine President Javier Milei. The scandal revolves around the February 14th launch of the $LIBRA meme coin, a cryptocurrency allegedly intended to help fund Argentina’s economic development.
A Promising Start Turns to Disaster
The launch of $LIBRA was backed by Davis, his family, and their venture capital firm, Kelsier Ventures. The same evening, President Milei took to social media to promote the project, calling it an initiative to “focus on encouraging the growth of the Argentine economy.” His endorsement sparked an immediate surge in $LIBRA’s value, pushing its market capitalization to an astonishing $1 billion within hours. However, the rapid rise was followed by an equally swift collapse, and by midnight, the token had lost most of its value.
Following the crash, Milei deleted his original post and distanced himself from the project, claiming in a new post that he had not been “aware of the details of the project.” But by February 16th, the fallout had escalated significantly. The Argentine president faced intense backlash from investors, fraud allegations from legal experts, and even calls for impeachment from political opponents.
Investigations and Legal Ramifications
Amid mounting pressure, an Argentine law firm formally requested that the U.S. Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) investigate Hayden Davis. Additionally, Argentina’s federal prosecutor launched a fraud investigation into the $LIBRA launch, citing allegations that crypto entrepreneurs had paid for access to Milei.
According to blockchain analytics firm Nansen, over 10,000 investors collectively lost at least $250 million in the $LIBRA collapse. Meanwhile, Davis admitted in interviews that he had profited nearly $100 million by selling his holdings before the crash.
The Meme Coin Phenomenon and Insider Profiteering
Meme coins like $LIBRA are digital tokens often created as jokes and largely fueled by speculation. As hype spreads on social media, the token’s value skyrockets—until a select few, often insiders who helped create the coin, cash out for massive profits, leaving everyday investors with devastating losses.
$LIBRA is just one in a growing trend of political figures engaging in meme-coin ventures. In January, U.S. President Donald Trump launched the $TRUMP coin, which saw a similar boom-and-bust cycle. Days later, First Lady Melania Trump introduced $MELANIA, a meme coin that Davis himself has claimed involvement in. The $MELANIA token, launched on January 19, briefly soared to a $2 billion market cap before crashing—though Davis insisted he made no money from it.
Despite public outrage, Davis has remained defiant about his role in these projects. In an interview with YouTube journalist Stephen Findeisen, known as Coffeezilla, Davis justified his actions: “It is an insider’s game. This is an unregulated casino.”
Milei, too, dismissed investors’ complaints, likening the crypto market to gambling: “It’s like someone who goes and plays Russian roulette and the bullet hits him.”
Sniping and Pump-and-Dump
Further scrutiny into the $LIBRA launch revealed that Davis engaged in “sniping”—a controversial practice in which automated bots and often insider knowledge are used to purchase tokens at launch before regular investors can react. By sniping his own coin, Davis positioned himself to benefit from the initial surge, potentially contributing to a pump-and-dump scheme that left thousands of investors with substantial losses. This tactic allowed him to accumulate a large portion of the token supply at a low price, only to offload them for massive profits as the market inflated due to Milei’s endorsement.
Blockchain analysts have flagged suspicious early transactions linked to Davis and his associates, reinforcing concerns that the coin’s launch was orchestrated to extract wealth from unsuspecting investors.
A Controversial Redemption Attempt?
Although Davis initially defended his actions, he later expressed regret over the way $LIBRA unfolded. He has suggested using his $100 million in profits to prop up the token’s price, claiming the money rightfully belongs to Argentina. However, critics remain skeptical of his motives.
In his interview with Coffeezilla, Davis asked for advice on how to fix the situation. He expressed concern over his and his family’s safety, as numerous death threats were made after the crash.
Conclusion
The $LIBRA debacle underscores the growing risks associated with the unregulated cryptocurrency market, particularly meme coins driven by hype and insider profiteering. With thousands of investors facing massive losses and multiple investigations now underway, the scandal serves as a stark reminder of the volatility and potential for fraud in the crypto space. Whether Hayden Davis and others involved will face legal consequences remains to be seen, but the fallout from $LIBRA is sure to have lasting effects on both the crypto world and Argentine politics.
