For readers who may be wondering why the above title features the name “Milei” in plural, there is a simple reason: the Milei clown show is a double act. The Argentine President Javier Milei has a sister, Karina, who, as his former campaign manager and current General Secretary of the Presidency, essentially manages his political agenda and personal expenses. She is, as her brother frequently describes her, “la Jefa” (the boss). And she is now the focus of a criminal investigation for her alleged role in the recent $LIBRA crypto scam.
Largest Ever Crypto Theft
The deputies of an opposition grouping that calls itself the “Civic Coalition” has filed a criminal complaint against Karina, accusing her of the crimes of bribery, influence peddling and violating the Public Ethics Law in relation to the $LIBRA meme coin scam, which Forbes magazine has described as the world’s “largest ever crypto theft”.
The article provides a brief reminder of how it all went down:
On February 14, Milei took to X to promote a little-known token called LIBRA, claiming it would boost Argentina’s economy by funding small businesses. His post linked to a website featuring his signature slogan, “long live freedom,” and assured his 3.8 million followers that “the world wants to invest in Argentina.” Thousands did. LIBRA skyrocketed from near zero to almost $5—before crashing to under $1 within hours.
Milei quickly deleted the post, claiming he was unaware of the project’s details, but the damage was done. Lawyers in Argentina, led by Milei’s political opponent Claudio Lozano, filed more than 100 fraud complaints against the president, and an Argentine judge opened up an investigation…
The numbers paint a brutal picture: 86% of traders who bought into LIBRA lost money, with total losses reaching $251 million, according to blockchain analytics firm Nansen. A lucky few pocketed $180 million.
The focus is now on Milei’s sister, who just a few years ago was scraping a living reading Tarot cards and selling “tortas” (cakes) out of her garage but is now arguably the most powerful woman in Argentina, drawing unflattering comparisons with Kim Yo-jong, the sister of North Korean leader Kim Jong-un.
The deputies behind the lawsuit accuse “la Jefa” of coordinating the President’s meetings with the promoters of $LIBRA. As general secretary of the presidency, Karina decides who gets to see the president and who doesn’t, and according to recent allegations, she has made a tidy little sideline out of it.
A year and a half ago, just before Milei’s election, the prominent Argentine businessman Juan Carlos Pallarols revealed that when he tried to arrange a meeting with Milei, he was told to speak to his sister, Karina, who “managed his agenda”. When he did that, Karina Milei told him that in order to set up a meeting, he would need to pay a “deposit” US$ 2000, for which purposes she provided bank account details.
Karina is also accused of coordinating the President’s meetings with the promoters of $LIBRA. The criminal complaint against her recalls the alleged message sent by Hayden Mark Davis, the creator of the token, in which he apparently said:
“I send money to his sister and he signs everything I say and does what I want.”
Once people like Davis were admitted to Javier Milei’s inner circle, they began making bank. As the New York Times reports, Davis told attendees of a crypto currency conference held in Buenos Aires in October that he had “control” over Mr. Milei and could broker deals:
“Everything from Milei tweeting” to “all the front-facing Milei stuff basically, showing up at things, et cetera — I have control over a lot of those levers,” Mr. Davis said in an audio message to an entrepreneur, obtained by The Times.
“But,” he added, “there’s a cost.” He insinuated that cost could be in the millions of dollars. “I’m not trying to screw anyone over,” he said, using an expletive.
Another entrepreneur said Mr. Davis made an even more brazen offer in writing: He would deliver a meeting with Mr. Milei and a partnership with the Argentine government in exchange for roughly $90 million in cryptocurrencies over 27 months, according to a copy of the proposal viewed by The Times.
There is no evidence that Mr. Milei was aware of the proposals.
Javier Milei already faces one criminal investigation in Argentina as well as another in the US over his decision to promote — or as he puts it “disseminate” — the rug-pulled LIBRA meme coin. Last week, Mauricio Claver-Carone, Donald Trump’s State Department envoy for Latin America, said in a CNN interview with Andrés Oppenheimer that the US justice system will investigate the $LIBRA scandal, in which “defrauded Americans” lost millions of dollars:
“It’s complicated that there were victims, defrauded Americans, hundreds — if not thousands — who have lost millions of dollars [to the $LIBRA cryptocurrency]. And [on top of] some of the president’s [Javier Milei] advisers were Americans… I think there are going to be judicial investigations; it is a complex issue, but a good lesson for President Milei, and for others, in the sense of being better advised, of having a better team and not falling into unnecessary mistakes and self-inflicted coups.”
In recent years Claver Carone has clashed with Milei and senior members of his government, in particular the Economy Minister Luis Caputo, arguing at one point that while “Milei speaks like a true orthodox liberal” at international conferences, “domestically he has a team that is governing like Peronists.”
The U.S. Department of Justice (DOJ) has reportedly already begun investigating President Javier Milei over his promotion of the LIBRA token, along with the alleged involvement of the project’s founders and two Argentine entrepreneurs. According to sources cited by Argentine newspaper La Nación, the DOJ initiated its investigation one week after the collapse of the meme coin. Reports indicate that the probe is still in its early stages, with authorities beginning to gather preliminary information.
Diverting Attention and Tightening Control
As the fallout from the $LIBRA scandal grows, the Milei siblings have done what most cornered politicians that have been caught scamming their own supporters would do: they have tried to divert attention from the meme coin scandal by whipping up a frenzy over other issues while trying to tighten their control over Argentina’s justice system.
To that end, Javier Milei appointed, by presidential decree, two friendly judges to the Supreme Court in an act that the constitutional lawyer Eduardo Barcesat has described as “institutional chaos” and “another step towards authoritarianism”. This is a trend that has intensified since the Libragate scandal.
At the end of Milei’s speech to open parliamentary sessions last week, Milei’s chief advisor, Santiago Caputo, the nephew of Milei’s Economy Minister (and former Wall Street banker) Luis Caputo, physically attacked one of the deputies who had jeered Milei during his speech. Even more disconcerting, this same advisor, who wields significant influence over Argentina’s intelligence agencies, ran a “mega-poll” in January to gauge whether Argentines would accept an authoritarian regime in exchange for greater economic stability.
Milei has also tried to appeal to the “law-and-order” vote by proposing to drop the age of criminal responsibility from 16 to 10 after a seven year-old girl was killed by a car driven by a 14 year-old boy, who cannot be criminally charged, and his 16-year old friend, who committed crimes when he was under 16. According to Milei, if Argentina had had a lower age of criminal responsibility, he would not have been free to steal the car and thereafter run over the seven year-old girl.
In his recent speech at the opening of the parliamentary sessions, Milei called for shaking up “all the penalties” of Argentina’s penal code. He has also tried to take advantage of the tragedy by calling on the Peronist governor of Buenos Aires Province, Martin Kiciloff, to resign and let the federal government intervene in the day-to-day management of the province.
Milei’s government has also landed itself in trouble by trying to rework the language for people with learning disabilities. In January, it published in the official gazette new parameters by which individuals will be evaluated in order to obtain, or continue to receive, a disability allowance. The terminology used included “idiot”, “imbecile”, and “mentally retarded.” The text was copied word for word from a decree signed in 1998 by President Carlos Menem, an ultra-liberal Peronist whom Milei considers Argentina’s best president despite the fact he laid the groundwork for the collapse of Argentina’s economy in 2001.
When the proposed language changes sparked a public backlash, the Milei government quickly backtracked and fired the minister in charge, but the intention was clearly there, and it speaks volumes about how the senior members of the government view the most vulnerable in society.
They include the pensioners who continue to bear the brunt of Milei’s austerity policies and continue to protest on a weekly basis against the pension freezes and cuts to subsidies, including for essential medicines. This is how they’re treated:
Economy About to Take Off, Or Fall Off a Cliff
Right now, the economy appears to be in “slow recovery” mode after just suffering one of its worst years this century. According to a new report by Nielsen IQ, household consumption plummeted by 17% in 2024 due to a severe adjustment in purchasing power. The combination of still painfully high inflation (117% accumulated in 2024) and the withdrawal of government subsidies for most basic services, from energy to transport, has left many households with little choice but to pinch their pennies.
“2024 marked a turning point in mass consumption in Argentina, with a historic drop that impacted all categories and sales channels,” said Javier González, commercial leader of NielsenIQ Argentina. “”By 2025, although a partial recovery is expected, the Argentine consumer will continue to be strategic in their purchasing decisions, prioritizing price and cost-benefit ratio.”
Though household disposable income has begun improving, according to the report it is still 40% below 2017 levels, the year before then-President Mauricio Macri requested an IMF bailout. And the last thing the country’s struggling industrial sector needs to hear: last year, industrial activity slumped by 9.4%, the highest fall since 2002.
How things proceed in the short term will depend largely on how quickly Argentina can sign its next deal with the IMF, which will mean another injection of much-needed dollars. It will also mean many years more of IMF-imposed structural adjustment, which of course Milei will happily apply…
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Nick Corbishley 