In Buenos Aires, the crypto community is fuming.
“This is a joke,” said an Argentine crypto lawyer.
“Disaster,” said a crypto employee.
“Hypocrisy,” said another.
But it was not unexpected. “It’s Argentina, man,” said one industry supporter.
In the crypto cafés and work spaces in Buenos Aires, the Libra memecoin rug pull and the role played by President Javier Milei in promoting the scheme is not going down well.
“Even though we aren’t entirely sure how involved he is, it’s a disaster,” said Mateo Moragues, a 23-year-old Argentine crypto user and worker in the space.
Like many local investors, Federico Sarquis, a 28 year Argentine developer, lost money when Libra surged following its release last Friday and then plunged more than 97%, erasing $4 billion in market value.
“I’m disappointed,” Sarquis told me. “I lost a lot of trust.”
Vibrant community
Known as the Paris of Latin America, Buenos Aires has cultivated a vibrant crypto community.
It’s home to a Bitcoin cultural centre, dozens of cafés that accept crypto, and a sprawling co-working spot in the heart of Palermo Hollywood, a trendy neighbourhood of bars and boutiques.
This is no accident.
The nation’s history of double and even triple-digit inflation has pushed many Argentines to seek a safe haven in alternative assets, including Bitcoin and other cryptocurrencies.
This is why Milei’s decision to endorse a token that went bust in no time stings so sharply.
By embracing crypto in tandem with his call to sweep away Argentina’s dysfunctional politics, the laissez-faire economist struck a chord with Bitcoin enthusiasts.
They trusted him.
“I saw his tweet, and even though I thought his account was hacked, decided to put in money,” Sarquis told me in a park in Colegiales, a sleepy, tucked-away neighbourhood with cobbled streets and hipster haunts.
Sarquis explained that he saw the tweet around 28 minutes after Milei posted it, when Libra’s market value was around $3 billion.
Knowing that he was a bit late to the party, he still invested. It wasn’t much, he said, “around $200.”
Another local investor did worse. Juan Pablo, a 23-year old Argentine crypto user, lost $1,000 in Libra.
“Balde de agua fría,” he told me. “It was a bucket of ice water.”
35,000 wallets
Milei has distanced himself from the Libra fiasco and claimed “he was unaware of the details” even though information has emerged this week that he met with the architects of the token before its release.
Onchain analytics firm Nansen reported that more than 35,000 wallet addresses bought into Libra, with 86% of traders losing money.
Milei has rejected those figures and argued that Argentines, for the most part, weren’t affected.
“There were no more than 5,000 actual investors,” Milei said in a televised interview on Monday. “Did Argentineans lose money? No. No more than five were probably Argentines.”
‘This creates yet another barrier to adoption.’
Mateo Moragues
Milei also asserted that Libra investors knew what they were getting themselves into.
“It’s a casino,” he said, before contradicting himself. “I shared the project because I thought it was serious.”
Sarquis was dismayed by the president’s response.
“His tweet wasn’t one of promoting memecoins, it was of a serious project,” Sarquis said. “What he said simply isn’t true.”
Blockchain Valley
The denizens of Blockchain Valley, a crypto hub in the Palermo Hollywood district, were equally peeved.
At Aleph, an open-plan, co-working site, industry founders, entrepreneurs and investors sipped coffee and worked on their laptops on Thursday as Libra headlines flashed across their screens.
“This is a joke,” Milagros Santamaría, a 30-year-old crypto lawyer, told me.
She’s been working on a project to develop a sandbox in the country, and called the situation “a disappointing blowback.”
Seated nearby, Mateo Moragues described the episode as a papelón, which is Latin American slang for a fiasco.
Mateo doesn’t just dabble in crypto.
With a position at SimpleFi, a firm devoted to integrating digital assets into daily life, he’s played a role in getting a number of cafés, bars, restaurants, and shops in the Palermo Hollywood area to accept crypto.
“This creates yet another barrier to adoption,” he told me. “It’s damaging.”
Fraud lawsuits
Maybe so, but it appears Milei will weather the scandal even though the opposition Peronist Party has vowed to initiate an impeachment inquiry and investors have filed fraud lawsuits naming the president as a defendant.
On Thursday, Argentina’s senate failed to muster the votes to launch a probe into Milei’s role in the Libra case.
Even so, Milei’s standing in Blockchain Valley is not what it was.
“It’s more than hypocrisy,” said a 39-year old crypto PR manager. “It’s deceit.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
