Solana-based memecoin $LIBRA, price pumped by initial endorsement of the Argentine President Javier Milei, has lost over 95% percent of its value in what is being claimed as the “biggest rug pull” in the history of crypto.
What Happened: Story of Another President-backed Memecoin
According to the website of the Viva La Libertad Project, the $LIBRA meme coin initiative was launched to boost the Argentine economy by funding small projects and local businesses.
The token started garnering public attention after President Milei promoted LIBRA, sharing echoes of the name of his political party La Libertad Avanza, in a now deleted X post:
As investors began to flood investments into the memecoin in a fomo frenzy similar to when the $TRUMP and $MELANIA memecoins were launched, the price of $LIBRA rose from $.50 to $4.50.
However, as doubts regarding its legitimacies started to emerge, including a community note warning investors on the President’s post, the coin hit peak market capitalization of $4.56 billion at 10:30 pm UTC on Feb. 14 before falling over 94% to the current $435 million market cap.
Analysts soon started describing it as a classic pump-and-dump.
How it was Executed: Behind the Scenes
According to onchain intelligence firm Lookonchain, at least eight wallets linked to the Libra team obtained 57.6M $USDC and 249,671 $SOL($49.7M) by adding liquidity, removing liquidity and claiming fees.
Not only did insiders begin cashing out within 3 hours of the launch but these insiders controlled so much of the market that only 27% of transactions were sales. It was retail investors who faced the fire.
Further, while the President has issued a withdrawal of his endorsement claiming he was unaware of the details and blamed political opponents, analysts have found were several pre-existing signs indicating $LIBRA’s unreliability:
- The website was created hours before the launch and was registered for a one-year period. It linked to a google form to apply for funding
- There is no public owner information and there are multiple restricted domain statuses.
- Furthermore, 82% of $LIBRA was held in one cluster and no tokenomics were shared with the public.
KIP Protocol, a Web3 company has stated that while it was involved in the $LIBRA project, it had no role to play in creating the token or profit from its sale.
In a recent statement, KelsierVentures has confirmed its role as an advisor to $LIBRA and the project’s initiator Hayden Davis has proposed to return the funds under his control to the token.
Crypto Twitter Reacts:
Many users were quick to hold President Javier Milei responsible for endorsing a project that ended in disaster:
Countless retail investors shared their frustration and losses as Libra’s value plummeted within hours:
Some believe this incident is the wake up call to mark the beginning of the end for memecoins and the start of alt season in the crypto market:
