Argentina’s stock market took a sharp nosedive Monday morning after the country’s president was hit with fraud charges for promoting a meme coin late Friday.
The S&P Merval dropped by over 5% when markets opened in Buenos Aires Monday, data from Yahoo shows.
The index, which tracks the biggest companies in the South American country, has since rebounded slightly but is still trading 3% lower than when it closed Friday.
Argentina’s markets have been thrown into chaos after President Javier Milei on Friday pointed his followers on X (formerly Twitter) to a Solana-based token called LIBRA.
The president had said in a now-deleted tweet that the project would be “dedicated to encouraging the growth of the Argentine economy by funding small Argentine businesses and startups.” A link to a website allowed investors to buy the token.
But after LIBRA surged in market value to over $4 billion, it crashed by nearly 90% within hours of the launch.
Firms tracking blockchain movements warned that data showed a small handful of wallets to be holding most of the LIBRA token—typical of a rug pull. In the crypto industry, rug pulls are when developers raise funds to deliver a project but then abandon it only to quickly cash out and keep investor funds.
Milei’s advisor on the LIBRA project, Kelsier Ventures CEO Hayden Davis, admitted in an interview with YouTuber CoffeeZilla that he removed roughly $100 million from the LIBRA liquidity pool and is in control of the funds.
Davis said, however, that he has no intention of personally profiting from those funds and is now waiting on word from Milei and the Argentine government before deciding what to do with the money.
The president’s office has since ordered an investigation and denied advanced knowledge of the LIBRA project. Lawyers in the South American nation have filed fraud charges against Milei and expect a judge to take action on the case as early as Monday, according to the Associated Press.
