Argentina’s Senate voted Thursday to scrap primary elections, delivering a major legislative victory to President Javier Milei just as he faces intense scrutiny over his role in a crypto rug pull that wiped $4.6 billion from the market last weekend.
Senators voted 43 in favour and 20 against, with six abstentions, to cancel this year’s primary elections. Argentina’s unusual system obliges all parties to hold simultaneous primaries a few months before legislative and presidential polls, acting as an election dress rehearsal that often causes market turmoil.
Javier’s crypto misadventures
Javier’s week took a sharp turn when his Friday night post on X—linking to a site selling the meme coin $LIBRA—triggered a market frenzy before the token crashed in value within hours. Furious investors accused Javier of participating in a “rug pull”, a classic pump-and-dump scheme where early players cash out while later buyers are left with worthless tokens.
The legal fallout was quick and brutal. Opposition lawmakers filed multiple fraud lawsuits, calling for an investigation into Javier’s involvement. The left-wing Peronist bloc led an impeachment push, saying the Argentinian president “deliberately misled the public” for financial gain.
Javier denies wrongdoing. Speaking to Todo Noticias on Monday, he insisted he never endorsed $LIBRA, claiming his post was “just a share, not a promotion” and that he deleted it once he realized he didn’t know the project’s details.
The presidential office maintains that Javier had no role in the coin’s creation and announced that the Anti-Corruption Office would investigate whether he violated ethical guidelines.
Adding to the drama, a report from La Nación revealed that Karina Javier, the president’s sister and chief of staff, held a private meeting with a consultant who later introduced Javier to $LIBRA’s creators. When opposition senators tried to summon Karina for questioning, they fell short of the two-thirds majority needed to force her testimony.
On Thursday, opposition senators attempted to launch an official probe into Javier’s involvement in the $LIBRA crash but missed the required two-thirds majority by a single vote. The failed attempt shows that, for now, Javier’s allies in Congress are standing by him despite the scandal.
Instead of staying in Buenos Aires to deal with the backlash, Javier boarded a flight to Washington on Thursday, where he was seen meeting Tesla CEO Elon Musk.
In a video posted on X, Javier gifted Elon a chainsaw, a nod to the deep budget cuts that have defined his presidency. Elon laughed and waved the engraved power tool, telling an audience it was “the chainsaw for bureaucracy.”
The October midterm vote will decide half of the lower house of Congress and a third of the seats in the Senate. Milei holds only six of the Senate’s 72 seats and roughly 15% of the lower house. A resounding victory would signal that Milei has the political support to cement his economic reforms in the long term and open up the country to foreign direct investment, which the long-stagnant economy desperately needs to grow again.
While Javier’s approval rating has only dipped slightly—down 1% to 48.4%, with his rejection rate rising 2% to 50%, according to polling company Trespuntozero—his long-term political future remains uncertain. The meme coin fiasco has shaken confidence in his leadership, even as his core support base remains intact.
For investors, the bigger question is whether Javier’s government can survive more shocks. Argentina’s recent history is littered with economic crises tied to elections. In 2019, then-president Mauricio Macri’s campaign collapsed after a primary loss sent Argentine bonds and the peso into freefall. In 2023, Javier’s own primary victory led to an overnight currency devaluation by his predecessors.
Now, with no primaries to disrupt markets, Javier’s government is betting on a more controlled lead-up to the midterms. However, the $LIBRA scandal remains an open wound, with the Anti-Corruption Office investigating whether Javier violated ethical or financial regulations.
