Trusting Argentine President, Chilean Retail Investors Lose $10,000 on Memecoin Investment

▲ Argentine President Javier Milei, LIBRA, memecoin/AI-generated image

A Chilean investor who lost $10,000 after investing in a memecoin based on the supportive remarks of Argentina’s president has declared he will leave the cryptocurrency market forever, warning of the risks of politically themed tokens.

According to cryptocurrency media outlet BeInCrypto on Feb. 20 (local time), 25-year-old Chilean investor Alfonso Gamboa Silvestre retired from the market after losing a significant portion of his assets by investing in the LIBRA coin promoted by Argentine President Javier Milei. Silvestre said he saw a post on President Milei’s official X (formerly Twitter) account and was convinced it was a project launched directly by the president, prompting him to invest a total of $5,000. However, the coin’s price plunged shortly after launch.

Silvestre had been interested in the virtual asset market since 2016 and had worked as a full-time trader since 2022. He previously earned substantial profits by investing early in TRUMP and MELANIA coins themed after U.S. President Donald Trump and First Lady Melania Trump. “Because President Milei had been seen meeting with Trump and Elon Musk, I believed the LIBRA coin would achieve similar success,” he recalled of his misjudgment.

Shortly after its launch, LIBRA became embroiled in so-called “rug pull” allegations, effectively swallowing investors’ funds. Silvestre attempted to exit as prices plummeted vertically but ultimately realized a final loss of $10,000—double his initial investment. “After the LIBRA incident, I completely stepped away from the cryptocurrency world, which I truly loved and which had brought me profits,” he said. “I once dreamed of living solely on investment returns in the future, but now I’ve lost all trust in the market.”

Silvestre is currently one of 212 investors participating in a class-action lawsuit against President Milei in Argentina. While Milei has claimed that LIBRA’s impact on investors was minimal, data from local exchange Ripio indicates that 1,329 Argentine citizens suffered financial losses from the coin. The damage has spread beyond Argentina to countries including Bosnia and Australia, and in the United States, a separate lawsuit is underway against Hayden Davis of Kelsier Ventures, who has been identified as being behind the project.

Over the past year, President Milei has offered inconsistent explanations regarding allegations of involvement in the LIBRA project, saying things such as “You don’t cry in a casino,” “I have the right to sell opinions,” “I wasn’t acting as president when I posted the tweet,” and “I was deceived too,” drawing criticism. Agustin Rombola, attorney for the plaintiffs, argued that the president must clearly explain how he came into contact with the project developers and why he shared a complex smart contract address exceeding 40 characters.

The collapse of a memecoin bolstered by political authority has once again underscored the need for greater transparency and regulation in the virtual asset market. For Silvestre and thousands of other investors, LIBRA marked not just a failed investment but a turning point that led to disillusionment with cryptocurrency technology itself. As judicial investigations continue, the incident stands as a stark example of how blindly trusting celebrity endorsements can lead to devastating consequences.

Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from it. The information should be interpreted for informational purposes only.