• In Argentina, a federal judge has caused the seizure of funds that are associated with LIBRA.
• Prosecutors followed the money trail and discovered that $500,000 was transferred to President Milei through Bitget.
• The fall of LIBRA is the largest crypto-fraud case in Argentina, with millions of investors losing their money.

The funds of the LIBRA project associated with Argentina’s President Milei are currently frozen by a judge in the country. The action follows growing claims of fraud, bribery, and abuse of political power. A combination of these led to the failure of the project.

Judge Freezes Assets Linked to LIBRA

According to a local media report, Judge Marcelo Giorgi described the project as a “hindrance to innovation.” This ruling affected U.S. based businessman, Hayden Davis, who is a strong promoter of the LIBRA token.

Argentinian Operator Orlando Mellino and his Colombian counterpart Favio Rodriguez were also affected by the ruling. The request was made by  federal prosecutor Eduardo Taino, citing multiple evidence that showed  investors lost over $100 million to the project.

The litigation is aimed at securing the assets which are suspected to be from a massive crypto fraud. The investigators found out that the wallets belonging to Davis and his associates were oddly active some months before the collapse of LIBRA.

The order further requires the National Securities Commission in Argentina to notify virtual-asset service providers. They are to freeze all the funds associated with the crypto platform within the country.

Also Read | LIBRA Token Scandal: Argentina President Javier Milei Cleared of Wrongdoing

Prosecutors Trace Political Links in LIBRA

Court records reveal that the operators have been facilitating crypto-to-fiat exchanges. They have allowed the transfer of millions of dollars in digital assets without detection for many months.  

Investigators traced multiple dealings of Davis with local businessmen, such as Mauricio Novelli and Manuel Godoy. All of them played a central role in the money flow across the project.  

On January 30, after President Milei posted a photo of the two on his page, Davis was accused of transferring over half a million dollars from Bitget. The tweet referred to Davis as an advisor in blockchain and artificial intelligence. 

According to prosecutors, the transfers may be bribes to officials in an attempt to conceal the beneficiaries of the project. The political aspect of the scandal was aggravated by the fact that some messages were leaked in which Davis could be heard boasting of his access to the inner circle of the President.  

In a message, he mentioned that he would take action and suggested that there would be no direct consequences of such actions. He added that Milei’s sister is one of the main channels of control.

LIBRA Promotion Triggers Political Fallout

The documents indicate that Novelli and President Milei had been deliberating on how to cash in on the image of the President well before the launch of LIBRA. Although the plans were made, there was a warning that there would be a conflict of interest by the President’s lawyer, Diego Spagnuolo. Still, there was a publicity drive where hundreds of persons invested in the project. 

According to the plaintiffs, the project was more or less a manual of scams. The group applied a lot of hype and false advertising to inflate the prices of the token before a well-planned sell-off.

The LIBRA collapse wiped out millions in investor funds and has since triggered Argentina’s most politically charged crypto investigation to date. The freeze of the assets will continue until the end of the judicial process or when all the illegitimate proceeds have been recovered.

Also Read | Hayden Davis Labels LIBRA Memecoin, Moves $500,000 During Milei Meet