Recently, the Argentine judicial system took significant action regarding a scandal involving the meme coin LIBRA, which is supported by President Javier Milei. According to market reports, Argentine Judge Marcelo Giorgi has formally ordered the freezing of assets related to the scandal and imposed an indefinite "prohibition of disposal order" on three key figures, including Hayden Davis and two cryptocurrency operators—Argentinian Orlando Mellino and Colombian Favio Rodriguez. This order means their properties and financial assets will be temporarily locked to prevent any potential transfers or disposals, while the relevant assets undergo in-depth judicial review.
Based on the application by Federal Prosecutor Eduardo Taino, this asset freeze measure was fully supported by technical reports issued by relevant departments such as financial investigation and illicit asset recovery. The reports not only recommended prosecuting the three suspects but also indicated substantial suspicious activity in their cryptocurrency wallets, which might be linked to illicit fund flows or fraudulent practices. After reviewing the case, Judge Giorgi determined that it met the criteria for reasonable suspicion and risk of delay, thus approving the asset preservation request to protect investor interests and ensure the smooth progress of judicial procedures. Preliminary estimates suggest that this incident has caused investor losses of approximately $100 to $120 million, with the scope potentially expanding further.
Notably, the judge emphasized in the order that the prohibition of disposal order is only effective for the strictly necessary duration to ensure it does not unduly affect the legitimate rights and interests of the relevant parties. Simultaneously, the judge also ordered the National Securities Commission to be notified to extend the asset freeze to all relevant platforms within Argentina, preventing funds from being diverted through other channels. This measure aims to strengthen supervision, prevent similar incidents from recurring in the cryptocurrency market, and maintain the stability of the financial system.
During the investigation, the prosecution uncovered a critical detail: just 42 minutes after President Milei posted a selfie with Davis on social media, Davis transferred $507,500 via the cryptocurrency exchange Bitget. This high temporal correlation has sparked speculation about potential misconduct, with the prosecution suggesting these transfers might constitute indirect bribery, i.e., funneling benefits through cryptocurrency transactions. This discovery not only adds complexity to the case but could also have far-reaching political implications, triggering broad public discussion on cryptocurrency regulation and public integrity.
Overall, this incident highlights the regulatory challenges facing the rapidly developing cryptocurrency market. As a major economy in Latin America, Argentina's judicial action may serve as a reference for similar cases in other countries. As the investigation deepens, more details are expected to emerge. Investors and market participants should closely monitor subsequent developments to assess potential impacts on the global cryptocurrency ecosystem.
