https://abcnews.go.com/Business/wireStory/argentine-judge-investigates-fraud-case-president-milei-crypto-118909364

“An Entrepreneurial Project”

Milei and his office denied involvement with creators of the $LIBRA cryptocurrency, saying he initially drew attention to it as an entrepreneurial project that might benefit Argentina but learned more about it later and then withdrew his support.

Lawyers in Argentina recently filed fraud complaints against the libertarian President. The case was assigned to Judge María Servini, head of Federal Court No. 1 in Buenos Aires. She does not have a deadline to finish investigating the allegations.

The Tweet

In a tweet that coincided with the launch of the $LIBRA crypto coin, Milei said that it was aimed at “encouraging economic growth by funding small businesses and startups.”

It enjoyed a brief spike in value above $4 billion in market capitalization, although its value began to decline amid the comments of critics that it could be a scam. Milei deleted the post a few hours later as the value of the cryptocurrency was collapsing in a downturn that caused millions of dollars in losses to many of its new investors.

The Coin

The coin, developed by KIP Protocol and Hayden Davis, could be obtained by accessing a link that directed users to a website called vivalalibertadproject.com, referring to the well-known phrase “Viva la libertad!” that Milei uses to close speeches and messages on his social media.

The President’s Response

The president's office said in a statement that Milei was not involved in any stage of the cryptocurrency’s development and decided to remove his post to avoid speculation and limit further exposure, following the public reaction to the project’s launch.

“The president shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina to create jobs and attract investments,” the president's office said.

After deleting the post, Milei said on X he was unaware of the details of the cryptocurrency and accused his political opponents of trying to exploit the episode.

“I have nothing to hide, and I have no problem coming forward and showing my face,” Milei said in an interview with the Todo Noticias channel. “Those who entered there voluntarily knew what they were getting into," he added. "As volatility traders, they understood the risks involved.”

His office said in the statement that the country's Anti-Corruption Office, which operates under the executive branch, would investigate the case.

Jonatan Baldiviezo, a lawyer and one of the plaintiffs, said that the plaintiffs allege that Milei's actions were part of an illicit association to commit “an indeterminate number of frauds” in the episode.

“Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” he said.

Discussion Questions

1. Define fraud.

Fraud consists of the following elements: (1) A false statement of fact; (2) made with the knowledge of its falsity (or reckless indifference as to its truth); (3) made with the intent that the listener relies on the false statement; (4) the listener relies on the false statement; and 5) the listener is harmed (economically, physically, or both).

2. Is the evidence presented in this article sufficient to establish that Argentine President Javier Milei committed fraud in promoting the $LIBRA cryptocurrency? Explain your response.

In your author’s opinion, the evidence presented in this article is not sufficient to establish the President Milei committed fraud in promoting the $LIBRA cryptocurrency. The only specific evidence included in the article is Milei’s tweet that coincided with the launch of $LIBRA, in which Milei said the cryptocurrency was aimed at “encouraging economic growth by funding small businesses and startups. President Milei’s office has responded to that evidence by asserting that his launch tweet was one of “daily” social media posts for entrepreneurs who wish to launch projects in Argentina to create jobs and attract jobs and attract investments.”

If the “rubber” is to “hit the road” here in terms of proof of fraud, that will have to be revealed in the prosecution’s other evidence against President Milei, through Judge María Servini’s investigation, and in any concomitant trial.

3. In your reasoned opinion, should cryptocurrency be legal? Why or why not? If legal, should it be closely regulated? Why or why not.

This is an opinion question, so student responses may vary. Although most certainly in the minority, your author believes that cryptocurrency should be illegal. Currently, cryptocurrency “parades” as both currency and a security (i.e., an investment), and yet it remains (for all intents and purposes) unregulated by the U.S. and other national governments. In fact, cryptocurrency is currently banned in only 10 countries: (1) China; (2) Egypt; (3) Algeria; (4) Bangladesh; (5) Nepal; (6) Afghanistan; (7) Morocco; (8) Bolivia; (9) Iraq; and (10) Russia.

Perhaps the fact that cryptocurrency is largely unregulated is a testament to (1) its popularity and (2) the implicit acknowledgement of world leaders that based on the “shadowy” nature of cryptocurrency, it would be difficult to regulate and even more difficult to eradicate.