Argentina’s federal judiciary has frozen assets tied to the collapsed Libra token, escalating one of the country’s most high-profile crypto scandals to date. The order targets U.S. promoter Hayden Davis along with two alleged intermediaries, Argentine operator Orlando Rodolfo Mellino and Colombian trader Favio Camilo Rodríguez Blanco.
Judge Marcelo Martínez de Giorgi authorized the freeze across digital wallets, bank accounts, and real estate, aiming to prevent asset flight while investigators trace a money trail estimated between $100 million and $120 million.
Argentina’s National Securities Commission has been instructed to notify all Virtual Asset Service Providers, effectively extending the freeze across domestic crypto platforms.
From Presidential Hype to Market Collapse
Libra’s rise and fall was swift and brutal. In February, the token surged after President Javier Milei briefly promoted Davis on social media, describing him as a blockchain and AI adviser. Within hours, the momentum reversed. Libra collapsed, wiping out roughly $250 million in value and impacting more than 40,000 retail investors.
Davis, who had previously promoted several meme-style tokens, quickly became the central figure in the alleged scheme. In May, a U.S. judge froze $57 million in USDC linked to Davis and associates at the now-defunct Meteora exchange. Those restrictions were later lifted after the court found no attempt to move the funds.
Lawsuits, Politics, and Cross-Border Enforcement
Investors in both the United States and Latin America have filed lawsuits accusing Davis, former Meteora CEO Ben Chow, and others of orchestrating a rug pull. The complaint invokes the RICO Act, framing Libra and M3M3 as parts of an organized fraud operation rather than isolated failures.
Argentine authorities have not filed criminal charges against Milei. However, court documents note that significant crypto transfers allegedly occurred during Davis’s meetings with senior political figures, including a visit to Casa Rosada. Investigators claim intermediaries converted tokens into cash during these encounters, fueling what local media has labeled Cryptogate.
Judge Martínez de Giorgi clarified that the freeze remains temporary, designed to secure evidence and protect potential restitution for investors. What stands out is the rare coordination between courts in Buenos Aires and New York, both pursuing the same blockchain-linked assets across jurisdictions.
Despite the controversy, Milei’s La Libertad Avanza party secured midterm victories, strengthening his political position ahead of the October 2027 presidential race.
The Libra scandal highlights a growing reality for crypto markets. Cross-border enforcement is catching up, and when politics intersects with blockchain finance, the fallout can be global, fast, and unforgiving.
