Dissolution of the UTI on Libra Token Rugpull Risks Exacerbating Argentina’s Political and Social Divides

Argentine President Javier Milei has dismantled the Investigative Task Force (UTI), a body established three months ago to probe the $Libra cryptocurrency scandal, as per a decree published in the official gazette, signed by Milei and Justice Minister Mariano Cúneo Libarona. The UTI was tasked with investigating allegations of irregularities after Milei promoted the $Libra token on X in February 2025, which led to a rapid spike and subsequent crash in its value, causing significant investor losses.

The $Libra scandal, often referred to as “Cryptogate,” erupted when Milei endorsed the cryptocurrency, claiming it would boost Argentina’s economy by funding small businesses. The token’s value surged from $0.000001 to $5.20 within 40 minutes but plummeted to $0.99 within hours, resulting in approximately $250 million in losses for an estimated 74,000 investors. Blockchain researchers reported that eight digital wallets linked to the token’s creators withdrew around $99 million, with allegations of a “rug pull” scam where insiders sold off their holdings after inflating the price.

Milei has faced significant backlash, including over 100 criminal complaints alleging fraud, calls for impeachment, and investigations in Argentina, the U.S., and Spain. He has denied wrongdoing, claiming he acted in good faith and was unaware of the project’s details, and ordered the Anti-Corruption Office to investigate. Critics, including opposition lawmakers and former President Cristina Fernández de Kirchner, have accused him of participating in a scam, with some labeling his actions a violation of Argentina’s Public Ethics Law.

The decision to shut down the UTI has raised concerns about transparency and accountability, as it was meant to scrutinize the roles of Milei and his sister, Karina, in the scandal. No official reason for the dissolution was detailed in the decree, but it coincides with ongoing legal and political challenges, including a federal judge’s investigation and international lawsuits. The move has sparked further criticism, with opponents arguing it undermines efforts to address the scandal’s fallout.

The dissolution of the Investigative Task Force (UTI) probing the $Libra cryptocurrency scandal under Argentine President Javier Milei carries significant implications and has deepened existing political and social divides in Argentina. Shutting down the UTI, which was tasked with investigating Milei’s role in the $Libra scandal, fuels perceptions of a cover-up. This move risks further eroding public confidence in Milei’s administration, already under scrutiny for promoting a cryptocurrency that led to $250 million in investor losses.

The lack of transparency, coupled with Milei’s denial of wrongdoing and the absence of a clear explanation for dissolving the UTI, may intensify accusations of corruption or mismanagement, damaging his credibility both domestically and internationally. The decision has amplified calls for Milei’s impeachment, with opposition figures like Cristina Fernández de Kirchner labeling it a deliberate obstruction of justice. This could escalate political instability, especially as Milei’s libertarian coalition, La Libertad Avanza, holds a fragile minority in Congress.

The scandal and UTI’s closure may weaken Milei’s ability to push his economic reform agenda, including his push for dollarization and deregulation, as public and legislative support wanes. The ongoing investigations in Argentina, the U.S., and Spain into the $Libra scandal are unlikely to be affected by the UTI’s dissolution, as they are led by independent judicial bodies or foreign authorities. However, the move could complicate Argentina’s international relations, particularly with countries pursuing lawsuits over the scam.

Domestically, the federal judge overseeing the case may face pressure to intensify scrutiny, potentially leading to legal challenges for Milei and his sister, Karina, who has been implicated in related allegations. The $Libra scandal has already cost an estimated 74,000 investors significant losses, further straining Argentina’s fragile economy, which is grappling with hyperinflation and currency devaluation. The UTI’s closure may deter future investment in Argentine markets, as it signals weak accountability for financial misconduct.

Milei’s initial promotion of $Libra as a tool to fund small businesses now appears contradictory to his libertarian free-market principles, potentially alienating his core supporters who expected economic innovation. The scandal has reignited discussions about regulating cryptocurrencies in Argentina, where crypto adoption has grown amid economic instability. The UTI’s dissolution may delay or derail efforts to establish oversight, leaving investors vulnerable to similar scams in the future.

Milei’s base, largely libertarian and anti-establishment, may view the UTI’s closure as a pragmatic move to avoid a politicized witch hunt. They argue that Milei acted in good faith and that the scandal is being exploited by opponents to undermine his reformist agenda. Opposition groups, including Peronists and center-left coalitions, see the UTI’s dissolution as evidence of Milei’s complicity or an attempt to evade responsibility. They argue it violates public ethics and democratic norms, with figures like Fernández de Kirchner accusing Milei of orchestrating a scam. This has fueled demands for impeachment and protests in Buenos Aires.

lower-income groups who lost savings in $Libra feel abandoned, while Milei’s middle-class and entrepreneurial supporters may prioritize his broader economic vision over the scandal. The judiciary and Anti-Corruption Office now face increased pressure to deliver results, as the UTI’s dissolution shifts responsibility to these bodies. This creates a rift between Milei’s executive branch and independent institutions, with potential for further legal battles.

The move also highlights tensions between Milei’s libertarian ideology, which favors minimal government intervention, and the need for state mechanisms to address financial misconduct, deepening ideological debates. Internationally, the scandal and UTI’s closure have drawn scrutiny from investors and regulators in the U.S. and Spain, where lawsuits are pending. This contrasts with domestic narratives, where Milei’s supporters frame the issue as a distraction from his economic reforms, while critics see it as a global embarrassment.

The dissolution of the UTI risks exacerbating Argentina’s political and social divides, undermining Milei’s credibility, and stalling economic recovery efforts. It intensifies the clash between his libertarian base and a broad opposition, while leaving unresolved questions about accountability in the $Libra scandal. The fallout could reshape Argentina’s political landscape and influence future cryptocurrency regulation, with Milei’s leadership increasingly under strain as legal and public pressures mount.