Judge focuses on key players in LIBRA scandal by freezing assets; scrutiny of Milei’s financial connections underway.

An Argentine federal judge has mandated the freezing of assets belonging to prominent individuals involved in the LIBRA memecoin initiative as investigators probe potential fraud associated with the marketing of the digital currency, including financial connections to President Javier Milei and his sister, Karina Milei, as reported by local news outlets on May 15.

Judge María Servini issued her decision on May 14 as part of a wider investigation into a suspected pump-and-dump operation concerning LIBRA. The memecoin attracted significant international interest after Milei publicly endorsed it via social media in February.

Furthermore, the judge permitted the removal of banking confidentiality protections for both Milei and his sister, granting investigators access to their financial records to look for irregularities involving the project’s endorsers.

On February 14, Milei posted a message endorsing LIBRA from his official social media account, presenting it as a means to achieve financial independence. His endorsement sparked a surge in retail investments, causing the token’s market capitalization to exceed $4.5 billion.

Nonetheless, following the tweet, the token’s value plummeted by over 85%, and liquidity rapidly disappeared, leading to accusations of market manipulation, insider trading, and overall fraud. The controversy severely damaged public confidence in Milei’s administration.

Documents related to the case indicate that Novelli served as a pivotal player in the operation, establishing links between the presidential entourage and Hayden Davis, an international investor who contributed to the project. Authorities have also issued an Interpol notice for Davis’s arrest.

Notably, Novelli secured a collection of bank safety deposit boxes just ten days before the tweet from Milei. Later media reports indicated that surveillance footage captured Novelli’s mother and sister removing substantial bags from these boxes the morning after the endorsement was made public.

A report from the Federal Police’s Anti-Money Laundering Division suggested that the size and handling of the bags imply they may have contained significant amounts of cash.

One local news outlet remarked that while the bags seemed empty upon arrival, they appeared noticeably heavier as the women departed, raising suspicions regarding cash withdrawals associated with the LIBRA initiative.

The asset freeze enacted by Judge Servini affects Novelli, Manuel Terrones Godoy, and Sergio Morales, all identified as key players in the alleged operation.

This 90-day measure prohibits the sale or transfer of assets and vehicles to preserve the financial footprint of those accused as prosecutors continue to investigate the alleged financial misconduct.

LIBRA was promoted as a digital solution for Argentines aiming to circumvent inflation and currency restrictions. However, critics have since charged that the project lacked transparency and exploited political influence to attract unwary investors.

Milei has refuted claims of personal benefit from the project and has since removed the promotional tweet amidst growing criticism. While the presidency has yet to comment on the recent judicial developments, the inquiry into the financial ties between his close associates and the token’s promoters is intensifying.

Opposition lawmakers are now demanding an independent investigation into the president’s role and whether his public endorsement amounted to an abuse of authority or market manipulation.