Milei And The Crypto Scam
Your questions answered and others raised
What the fuck happened?
The Guardian has the basics here,
Milei endorsed the little-known cryptocurrency token $Libra on Friday evening, announcing on X that the project was “dedicated to boosting the growth of the Argentine economy by funding small businesses and entrepreneurs”. His post linked to a website where the digital coin could be bought, the domain name of which included Milei’s popular catchphrase “long live freedom”.
“The world wants to invest in Argentina,” Milei added in the post to his more than 3.8 million followers.
The token immediately soared in value, from almost zero at the time of its launch to nearly $5, before plummeting to under $1, according to trading sites. Argentina’s fintech chamber said that the case could amount to a “rug pull” – a scam which sees cryptocurrency rapidly inflated, or “pumped”, before crashing while insiders “dump” their stake, making the tokens worthless. Other economists and crypto specialists said the digital asset could be a fraud or Ponzi scheme.
Why did he do it?
He says he was approached by a cryptobro called Hayden Davis and others at a fintech conference in October last year and they proposed a mechanism for Argentine entrepreneurs trapped in informality to raise finance outside the mainstream system. It’s not clear, to put it mildly, how these entrepreneurs could have availed of this financing had this meme coin not crashed and burned.
So why did he delete the tweet promoting this?
He first said it was because he hadn’t fully understood what the cryptobros were really up to, but he now says because was people were saying his account had been hacked and it wasn’t so he decided to take down the tweet.
No, it doesn’t make any sense to me either.
He also says that at no time did he promote the meme coin, rather he “disseminated” it, the Spanish verb is “difundir”.
Promote or disseminate; a distinction without a difference. He’s the President.
And those who lost their shirts?
He says that there were “only” 5,000 of them and they knew the risks they were taking. At no point does he have a word of criticism for Davis and his crypto colleagues. You’d imagine that he’d try to divert some of the blame but nothing, crickets. The nearest he comes to it is when he says that he’s been too open to people who want to talk to him and that now he’s going to use more “filters”
Do the cryptobros have something on him? Has he signed something unconfessable?
So you think he benefitted financially from all this?
I don’t know but I tend to doubt it. He’s nuts but he’s totally sincere about his tech evangelism, and the rest of his opinions too.
My answers above are based on an interview with Milei that went out on the nation’s biggest news channel last night. It was hardly off the air when the unedited version was leaked to Twitter.
Look at 1:04:00. Having questioned Milei at the start about the scam the journalist returns to it. When the president argues that he tweeted from his personal account as a private citizen, not as president a voice off-screen can be heard and a figure in a white shirt appears and whispers to Milei, then retreats from the scene and the journalist says, “Where do we begin again?”.
It’s evident that he told Milei to shut up and stop incriminating himself.
But advisers interrupting recorded interviews to whisper something to the boss is something that has always happened in TV interviews
The guy who intervenes is not some random comms flack. It’s Santiago Caputo, a 41-year-old gun enthusiast who despite having no formal role in the government is a figure of enormous power in it. He controls the state intelligence service and has a preponderant influence in most of the rest of the government’s activities apart from the direct management of the economy, controlled by Luis Caputo and Federico Sturzenegger.
British readers: imagine Morgan McSweeney squared and running MI5, with one or more of his guys in the senior ranks of every ministry.
Was Santiago Caputo involved in the scam?
It’s reasonable to speculate but I don’t know and I tend to think he’s not the sort of person easily impressed by cryptobros with incel vibes
It’s also reasonable to wonder about who leaked the uncut version of the interview and why. It makes Milei look like a puppet of Caputo and such leaks are not habitual.
Apart from the scam itself it’s the leak that’s the big story
What’s going to happen now?
Probably not much. A whirlwind of legal complaints and cases is forming that will take some effort to beat off but won’t have tangible effects till he leaves office.
The numbers in Congress aren’t there for an impeachment and the kirchnerista legislators are in no position to pearl clutch given that their hero and leader, Cristina Fernández de Kirchner, has already been convicted of corruption on a massive scale and is facing various further trials
Above all, inflation is down to a mere 2.2% a month and people are happy with that, at least for the moment.
The biggest political effect is that Milei now looks like a complete fucking idiot, that’ll bother people more than the charge of corruption
PS: As I was writing this I chatted to a friend in Argentina on WhatsApp about the scandal. She casually mentioned that it hadn’t affected her crypto portfolio (!). I can’t give info that would identify her but maybe it’s normal for ordinary middle class people in Argentina to be familiar with the ins and outs of crypto, and hence to be vulnerable to a scam like this if they admire the person promoting it.