Political support leading to increasing fallout for crypto
Support for cryptocurrencies from US President Donald Trump or Argentine leader Javier Milei has seen investors lose billions of dollars and is damaging a sector struggling for credibility, researchers told AFP.
“The entire crypto industry is being tarnished,” said Claire Balva, strategy director for fintech company Deblock.
Argentine prosecutors are reportedly examining whether Milei engaged in fraud or criminal association, or was in breach of his duties, when he praised the $LIBRA cryptocurrency on social media in February.
The token’s value soared from just a few cents to almost $5 and then crashed. Milei deleted his blessing hours later.
He denies all allegations made against him.
“I did not promote it,” Milei told broadcaster TN in February, adding it “is a problem between private parties because the State does not play a role here”.
“I acted in good faith,” he said.
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The price collapsed after a handful of early investors decided to sell at a huge profit, causing colossal losses for the majority of those who purchased $LIBRA.
It also dragged down prices of other cryptocurrencies, including bitcoin.
Hayden Davis, who helped launch $LIBRA, said he had been inspired by the initial success of Trump’s memecoin, $TRUMP, that marked the president’s inauguration.
Having reportedly made Trump at least $350 million, according to the Financial Times, about 810,000 buyers went on to lose more than $2 billion combined, stated crypto data group Chainalysis.
A memecoin is a cryptocurrency that rides on the popularity of a viral personality or phenomenon on the internet and is often seen as a purely speculative asset.
Relying on trust
Once a fierce critic of cryptocurrencies,
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