Libra Token Crash: 99% of Traders Lose in Latest Crypto Scam

The LIBRA token, a Solana-based memecoin initially touted as a breakthrough digital asset in Argentina, has crashed in what is being called one of the most damaging crypto scams in recent history.

Originally, LIBRA surged to nearly $5 per token, driving its market cap to an astonishing $4.4 billion. However, within hours, the token’s value plummeted to under $1, leaving 99% of traders with heavy losses and a total loss of approximately $286 million.

The token’s history is as turbulent as its performance. LIBRA was launched amid much fanfare, with high-profile endorsements that included a now-deleted post by Argentine President Javier Milei on his social media account. Milei’s endorsement, seen by over 3.8 million followers, falsely suggested that LIBRA was a government-backed initiative designed to boost Argentina’s economy.

This move fueled investor enthusiasm and rapidly inflated the token’s market cap, only to result in a classic “rug pull” a scam where insiders exit their positions after luring in unsuspecting investors.

Reports indicate that key figures behind LIBRA include Julian Peh, CEO of KIP Protocol; Hayden Davis, CEO of Kelsier; Mauricio Novelli; and Manuel Godoy. These individuals are alleged to have coordinated the token’s promotion and manipulated its value.

In interviews, Davis admitted to sniping LIBRA tokens and claimed to control over $100 million in funds related to the token. Additionally, blockchain analytics show that some wallets lost over $1 million, and one investor even recorded a staggering $5.17 million loss after purchasing 2.1 million tokens.

The crash has not only resulted in substantial financial damage but also ignited a political firestorm. Opposition lawmakers have threatened impeachment proceedings against President Milei, arguing that his endorsement misled investors and contributed to the inflated market cap.

In a Reuters report, lawmakers described the incident as a “national embarrassment” with international implications. Although Milei later claimed he was unaware of the token’s true nature and merely shared the post by mistake, his actions have only intensified calls for a thorough investigation.

The LIBRA incident is part of a broader pattern of fraud in the volatile crypto market. Similar scams have exploited celebrity endorsements and manipulated token launches in the past.

Moreover, LIBRA’s collapse has deepened a liquidity crisis in the altcoin market, where fresh capital is scarce and funds are often merely shifted between projects rather than growing overall market value.

In response to the widespread losses, industry figures and even former Binance CEO Changpeng Zhao (CZ) have urged investors to exercise extreme caution and verify all crypto investment opportunities through trusted channels before committing funds.