Argentinian authorities are escalating their response to the LIBRA memecoin scandal, with a federal judge ordering a widespread freeze on assets linked to the controversial cryptocurrency. The move comes amidst growing concerns about potential fraud and money laundering, with estimated investor losses ranging from $100 million to $120 million.
Judge Marcelo Giorgi issued a "prohibition of innovation" order, effectively blocking the transfer or disposal of properties and financial assets belonging to key figures implicated in the scandal. Those targeted include Hayden Davis, an associate of Argentinian President Javier Milei, as well as two cryptocurrency operators: Argentine Orlando Mellino and Colombian Favio Rodriguez. The freeze will remain in effect indefinitely while the judicial process unfolds and applies to all Argentinian crypto asset platforms.
The judge's decision was prompted by a request from federal prosecutor Eduardo Taino, who presented a technical report detailing suspicious financial activities. The report, compiled by Argentina's financial investigation agencies, highlighted the individuals' involvement in questionable crypto transactions and potential money laundering schemes. Authorities are particularly scrutinizing crypto wallets associated with Mellino and Rodriguez, which have registered suspicious activity. These operators are believed to have acted as intermediaries in converting cryptocurrency to fiat currency.
Adding fuel to the fire, investigators are examining a $507,500 transfer made by Davis through the Bitget exchange shortly after President Milei posted a selfie with him on social media. The timing of the transaction – just 42 minutes after the tweet – has raised suspicions of possible illicit dealings and indirect bribery.
Further complicating matters, Rodriguez is allegedly linked to a safety deposit box attributed to Mauricio Novelli. Novelli's sister and mother purportedly withdrew bags from a Banco Galicia branch hours after the LIBRA price plummeted, suggesting a coordinated effort to move funds. According to Blockworks analyst Fernando Molina, Bitget revealed key crypto transactions linking Davis with Novelli and Manuel Terrones Godoy, two individuals connected to the launch of LIBRA.
The investigation has also unearthed claims that Novelli and Milei discussed leveraging the president's image for financial gain in the months leading up to LIBRA's launch. The alleged plan involved using Milei as a "highly personal asset" in a manner designed to circumvent ethics regulations.
With the investigation committee expected to present its final report on November 18, speculation is mounting that the findings could trigger impeachment proceedings against President Milei. The report may reveal that Milei shared a modus operandi with Novelli and Godoy in the launch of LIBRA.
