The $LIBRA Memecoin Scam: Inside the Presidential Pump-and-Dump That Led to a $4 Billion Crash

The post The $LIBRA Memecoin Scam: Inside the Presidential Pump-and-Dump That Led to a $4 Billion Crash appeared first on Coinpedia Fintech News

After Argentine President Javier Milei endorsed the LIBRA meme coin launched on February 14, 2025, it has become the subject of investigations by experts due to a pump-dump scam. When insiders quickly sold off their shares, they withdrew $107 million, causing the coin’s value to crash and wiping out over $4 billion from its market cap within just a few hours. This report will look into how the market reacted, the overall sentiment of the community, and the effects of the coin’s launch. We’ll also explore the roles of major figures, the Argentine government, and what might happen next with the $LIBRA coin.

From Startup to Scam: All About LIBRA Meme Coin

$LIBRA is a cryptocurrency created by entrepreneur Hayden Davis, who is also the CEO of Kelsier Ventures, a crypto investment firm. Bloomberg reports that KIP Protocol, a company focused on decentralized AI technology, was involved in launching $LIBRA.

KIP claims they joined after the launch to help select tech projects and support AI efforts. The coin runs on the Solana blockchain, known for its quick and cheap transactions, popular with meme coin traders.

People could buy the token through a website named vivalalibertadproject.com, a slogan often used by Milei, whose political party is also named La Libertad Avanza.

Presidential Endorsement Ignites a Meteoric Price Surge

On the evening of February 14, Argentine President Javier Milei posted on social media that the $LIBRA token would boost Argentina’s economy and support small businesses. He linked to the token’s website, promoting it as a way to fund local companies and ventures. It was reported that the $LIBRA token was created just before Milei’s announcement and the website domain was registered the same day.

Milei claimed in his post that Argentina was attracting global investment. Initially, $LIBRA’s price started near zero and was concentrated in a few digital wallets. After Milei’s endorsement, its price skyrocketed to nearly $5, pushing its market cap over $4 billion.

https://twitter.com/KobeissiLetter/status/1890611969075413316

However, a community warning soon appeared on his post, advising users to verify the project before engaging, suggesting it might be a scam where developers abandon the project after collecting funds. Shortly after, Milei deleted his post and claimed he wasn’t fully aware of the project details and decided to stop supporting it.

Within a few hours, the token’s value plummeted to just cents, and its market cap lost over $4.4 billion. According to The Kobeissi Letter, insiders started selling off $87.4 million worth of $LIBRA within the first three hours of its launch, and 82% of the tokens were controlled by a single group without public disclosure of the token’s economics.

Hayden Davis, the entrepreneur behind $LIBRA, admitted to keeping some profits despite the token’s sharp decline.

President’s Gamble was Unexpected 

Interest among retail investors in memecoins with celebrity endorsements surged following the release of the Official Trump (TRUMP) memecoin by US President Donald Trump on January 18. This was closely followed by the launch of the Melania Meme (MELANIA) token by First Lady Melania Trump on January 19 on the Solana network, just before the President’s inauguration on January 20.

Despite admitting to the mistake by the president, he again went on to retweet a post guiding how to buy Libra memecoin. The endorsement of the Libra meme coin by the Argentine president himself is very unexpected. A promotion of a random meme coin by such a highly valued government personal is the worst thing. This move by the president has been seen as unusual and indicates his active involvement in the scam. 

The scam of Libra also impacted TRUMP token, resulting in a drop of $500 million in the market cap. 

Argentina Officially Launches $LIBRA Investigation

Before the collapse, other blockchain data companies had already raised concerns about the project. For example, the blockchain analysis firm Bubblemaps highlighted issues with LIBRA’s tokenomics, pointing out that 82% of the tokens were available to be sold right from the beginning.

According to a statement from Argentina’s presidential office, the Oficina del Presidente, issued on X on February 16, Milei has asked the Anti-Corruption Office to investigate himself and all other government members for possible misconduct.

Meanwhile, Milei is under pressure from political rivals calling for his impeachment following his endorsement of a cryptocurrency that led to a $100 million scam.

In his statements and tweets, Milei has denied knowing about the project beforehand. However, he has deleted these statements. Additionally, differing stories are coming from others involved. Early Monday, KIP Protocol, a crypto and AI firm that has previously worked with the Argentine government, issued a detailed statement challenging many claims about their role in the LIBRA token launch.

The firm insists that their CEO, Julian Peh, only met with President Milei once on October 19, 2024, and that meeting did not cover any specific projects, including “Viva la Libertad” or any token launches. According to the company, no other staff members had meetings with the Argentine President.

Key Players and Their $LIBRA Conspiracy Exposed

After the LIBRA coin mess, the investigative journalist Coffeezilla reached out to people connected to the 0xcEA address and its creators. He found out that Hayden Mark Devis, CEO of Kelsier Ventures, his father Tom Davis, and known scammer Arunkumar Sugadevan were behind it.

In an interview, Tom Davis confessed that their group not only made the LIBRA memecoin but also manipulated its initial sale to profit from it. They used several wallet addresses to buy early and made $6 million from these actions.

Insider Trading Tactics

The investigation into the LIBRA scam showed that the scammers behind the project used their inside knowledge to play the market to their advantage. They used multiple wallets to quickly buy up large amounts of the token as soon as it launched, a tactic known as “sniping.”

This involves purchasing a newly launched token as soon as it is released, often before regular investors have a chance to react. These early buyers then sell their large holdings a few hours later for a significant profit, leaving ordinary investors with losses.

In the LIBRA case, the snipers, linked to the wallet address 0xcEA, sold over $100 million worth of the token just as its market value peaked, capitalizing on the surge and leaving other investors with devalued assets.

Connection Between Melania and Libra Memecoin

A joint investigation by the blockchain analytics firm Bubblemaps and the pseudonymous on-chain investigator Stephen Findeisen, also known as Coffeezilla, has revealed evidence that the same group was behind the failed launches of both the LIBRA and MELANIA tokens. Bubblemaps shared on Twitter, “After analyzing cross-chain transfers and timing patterns, we’re highly confident this is the case.”

The investigation found that connected wallet activities between different projects showed how profits from one scheme were used to fund another via cross-chain transfers. For example, a key wallet on the Solana network, labeled “P5tb4,” made over $2.4 million from early trades of the MELANIA token and then transferred those funds to an Avalanche wallet “0xcEA” linked directly to the token’s creator.

Blockchain records show that the wallet 0xcEA transferred 1.6 million USDC to three Solana wallets just a few hours before the $LIBRA token was launched. These wallets then quickly bought 3.77 million $LIBRA tokens and sold them for 8.25 million USDC, making a profit of $6.65 million.

Further analysis indicates that the wallet “0xcEAe…06e2” transferred USDC from Avalanche to Solana and made payments to Dave Portnoy, suggesting that this wallet could be directly linked to the $LIBRA team.

The LIBRA token, which briefly had the support of Argentine President Javier Milei, quickly reached a multi-billion-dollar market cap before plummeting 95% when insiders pulled out $87 million. Similarly, the MELANIA token, endorsed by the U.S. first lady in January, soared in value initially but then crashed, leading to significant losses for everyday investors.

According to Bubblemaps, this group likely led several other token launches with names like TRUST, KACY, VIBES, and HOOD, all following similar patterns of quick profits followed by sharp declines.

Tracing the Same Snipers: From TRUMP to LIBRA

New data from Arkham indicates a pattern of quick large-scale purchasing by the same group behind both the TRUMP and LIBRA memecoin launches. Blockchain records show that an entity connected to the 6QS address—which sniped over $1 million worth of TRUMP tokens in the first block of its launch—went on to distribute those tokens to the 5CP wallet and related addresses, eventually selling TRUMP for substantial profits.

https://twitter.com/arkham/status/1891547114032791805

Shortly after President Javier Milei retweeted a “How to Buy LIBRA” post, an address linked to this same network purchased $5 million worth of LIBRA. 

This rapid, high-volume buy shows the earlier TRUMP sniping strategy, suggesting a similar approach to exploiting memecoin launches and endorsements. Investigators say such repeated, large-scale tactics point to systematic insider market manipulation, bringing concerns that the individuals behind these trades are orchestrating pump-and-dump schemes across multiple projects.

Conclusion

Until the investigation concludes, we are left wondering who is really behind the scam: The President of Argentina, KIP Protocol, Kelsier Ventures, or Hayden Davis?

The LIBRA incident highlights the increasing dangers in the memecoin market. While many investors are drawn to the potential for fast returns, it’s often the insiders who actually benefit.

As more frauds are exposed, the demand for stricter regulation and greater openness in the memecoin space grows more urgent. The role of the 0xcEA wallet in the LIBRA scam showcases the darker side of the crypto space, where deceptive financial tactics and dishonesty run rampant without any checks.