Argentina's crypto scandal dings Milei, involves strange mix of characters

BUENOS AIRES, Argentina (AP) — Argentine President Javier Milei is facing a corruption probe into his promotion of a meme coin, which is a highly speculative form of cryptocurrency that’s surged in popularity after President Donald Trump and his wife launched tokens of their own.

The budding scandal in Argentina has been dubbed locally as “cryptogate” and has links to a diverse cast of characters, including a high-profile U.S. influencer, a crypto developer who uses the pseudonym “Meow,” and a 28-year-old American entrepreneur who said he helped launch first lady Melania Trump’s meme coin last month.

Here’s an explainer on what happened and where things stand:

Meme coins are a type of cryptocurrency that are generally just goofs on internet memes, viral moments or celebrities that aren’t trying to make use of a new technology or solve any new problems. They often have silly names, like Dogecoin, or Fartcoin.

Critics – including many cryptocurrency enthusiasts — say they are nothing more than digital Ponzi schemes that exist to enrich insiders at the expense of retail investors. Those more supportive say meme coins shouldn’t be so easily dismissed and could be early indicators of ways in which the internet could revolutionize financial and other transactions.

“New technologies often look like a toy but evolve into something much more powerful over time,” Coinbase CEO Brian Armstrong said in a recent social media post.

In short, a disaster.

Milei, the tech-loving, chainsaw-wielding, libertarian president of Argentina, posted on X about the meme coin $LIBRA on Friday, just after it had launched, stating he was “encouraging economic growth by funding small businesses and startups.” 

The coin’s price soared almost immediately, pushing the market value for the project beyond $4 billion.

A few hours after launch, early holders of the coin started cashing out of the project and its price collapsed.

The trajectory of $LIBRA’s price had the hallmarks of a “rug pull,” a not uncommon phenomenon with meme coins. Rug pulls occur when insiders dump their holdings in newly launched meme coins that are soaring in value, which tanks the price and causes losses to newer investors.

Milei deleted his initial post after the price collapsed and distanced himself from the project. By Monday, dozens of criminal complaints had been filed, a judge in Argentina had been selected to investigate allegations of fraud and Argentina’s main opposition party called for his impeachment.

On Friday, a federal prosecutor formally opened the probe to determine the involvement of Milei and five others in the creation and promotion of $LIBRA, for the possible crimes of bribery, fraud, influence peddling and abuse of authority.

A defiant Milei insisted he had acted in good faith and said that he had asked the Justice Ministry’s Anti-Corruption Office to investigate if he or anyone else had committed wrongdoing.

Hayden Davis, a 28-year-old American crypto developer who said he’s an adviser to Milei and helped launch $LIBRA, has emerged as a central figure. Milei’s office said the government has no connection to Davis.

In an interview with independent crypto journalist Stephen Findeisen, Davis said that meme coins are essentially a rigged game that benefit a small group of people at the expense of retail investors.

“It is an insiders’ game. This is an unregulated casino,” Davis said.

Davis said the $LIBRA coin was not a rug pull but was supposed to be an experiment to show the power and utility of digital currency that’s consistent with Milei’s desire for Argentina to be a hub for innovation.

Davis also said he was involved in the launch of Melania Trump’s meme coin. Launched just before her husband took office, that meme coin’s price underwent a similar trajectory as $LIBRA — quickly soaring upon launch and then dropping. The first lady’s office declined to comment.

Online influencer Dave Portnoy, who founded the Barstool Sports podcast empire and is a vocal gambling enthusiast, said on social media that Davis had told him about $LIBRA’s launch before it went public and asked him to promote it.

Portnoy said there were also discussions about the possibility of him interviewing Milei, much like he’d done with President Donald Trump during his first term. Portnoy said he did not buy any $LIBRA until after Milei’s post on X and lost money on the purchase when the price crashed. Davis said he reimbursed Portnoy’s losses.

“Meow” is the anonymous co-founder of a crypto firm involved in launching meme coins, including $LIBRA, said on social media that they were confident that no one at the firms had been involved in insider trading or financial wrongdoing. Still, Meow said the company had hired a law firm to conduct an independent investigation and that one of the company’s leaders had resigned for showing “a lack of judgement.”

Cryptogate represents the first big scandal of Milei’s presidency. Analysts said it risks eroding public confidence in Milei, who rose to prominence as an iconoclastic economist vowing to tame Argentina’s sky-high inflation and eliminate corruption among the political elite.

Questions remain over how this will affect the Milei administration’s perception among foreign investors at a crucial time in which the government is hoping to ease strict currency controls and negotiate a loan with the International Monetary Fund. He is now in Washington meeting with Tesla chief Elon Musk and other high-profile tech leaders in a bid to generate hype for his economic overhaul.

Meme coins don’t appear to be going away anytime soon, but their track record should serve as a cautionary tale for investors and creators alike.

The meme coins promoted by Trump and his wife have seen their prices fall dramatically since the days after their launch and drawn criticism from some Democrats and crypto enthusiasts.

Hailey Welch, better known as Hawk Tuah Girl, saw her popularity plummet after her meme coin collapsed amid allegations of a rug pull. And celebrity Caitlyn Jenner is the defendant in an ongoing class action lawsuit filed by investors who said they were duped into losing money on the $JENNER meme coin. Welch and Jenner have both denied wrongdoing.

The impoverished Central African Republic issued a meme coin earlier this month. After a brief spike, its price has also collapsed.

Suderman reported from Richmond, Virginia.

Riot police stand guard as a demonstrator holds a banner depicting the $Libra cryptocurrency during a protest organized by retirees demanding better pensions, in Buenos Aires, Argentina, Wednesday, Feb. 19, 2025. (AP Photo/Rodrigo Abd)

The national newspapers Clarin, right, and Pagin 12, left, are displayed for sale at a newsstand outside La Casa Rosada presidential office carrying headlines on a cryptocurrency scandal involving President Javier Milei in Buenos Aires, Argentina, Monday, Feb. 17, 2025. (AP Photo/Rodrigo Abd)

Argentina's President Javier Milei holds up a chainsaw as he arrives to speak at the Conservative Political Action Conference, CPAC, at the Gaylord National Resort & Convention Center, Thursday, Feb. 20, 2025, in Oxon Hill, Md. (AP Photo/Jose Luis Magana)

A demonstrator holds a banner depicting President Javier Milei and the $Libra cryptocurrency during a protest organized by retirees demanding better pensions, in Buenos Aires, Argentina, Wednesday, Feb. 19, 2025. (AP Photo/Rodrigo Abd)

SANTA CLARA, Calif. (AP) — The San Francisco 49ers are opening the practice window for star linebacker Fred Warner with the hope that he could return if the team reaches the NFC title game.

Warner has been out since breaking and dislocating his right ankle in a loss at Tampa Bay on Oct. 12, with coach Kyle Shanahan initially describing it as a season-ending injury.

But Warner has been rehabbing since then and even was able to run on a side field last week during practice. Now he will be back officially at practice as the 49ers prepare to play Seattle in the divisional round on Saturday night and could return if San Francisco wins.

“We’re not doing much so he’ll walk through out there with us today and things like that, but hoping he can be ready for next week,” Shanahan said Tuesday.

Warner's presence on the practice field even for a walkthrough provided an emotional lift for the 49ers.

“For someone who really set the standard here, I would do anything to play with him again this year,” defensive tackle Kalia Davis said. “We want him back out there.”

Eric Kendricks is currently manning Warner's spot at middle linebacker after backup Tatum Bethune got hurt but wasn't ready to talk about what Warner's possible return would do for the team.

“We’re aren’t going to talk about next week, right? We’ve got Seattle,” Kendricks said. “We’ve got to beat Seattle. Let’s pump our brakes. We have to beat Seattle this week. .. This is what meaningful football is all about.”

The 49ers have made it this far despite losing their top two defensive players to injuries early in the season, with defensive end Nick Bosa going down with a season-ending knee injury in Week 3 and Warner getting hurt in Week 6.

Warner has been pushing to make a return and if he can, that would provide a needed boost. But Shanahan said the final decision will be in the hands of the team doctors.

“If he feels good and tells me he’s good, I’m probably going to think he is and trust him to get out there,” Shanahan said. “But you can't always think with your heart and emotionally. So you ask doctors where he’s at, all the things that these guys have to pass, just protocols that we have in with just sprinting and jumping and things like that. He’s got to hit all those before we feel it’s safe.”

But Shanahan added that as soon as the doctors clear Warner, "obviously it’ll be zero decision on my part.”

Warner had been a first-team All-Pro three straight seasons from 2022-24 and made the squad in 2020. His 947 career tackles are the second most for the team, behind Patrick Willis’ 950, as far as records go back to 2000.

Warner had missed only one game in his eight-year career before this injury, sitting out in 2021 with a hamstring injury. He played most of last season with a broken bone in his ankle and still earned All-Pro honors.

Warner signed a three-year extension worth $63 million in the offseason, keeping him under contract with the team through the 2029 season.

In other injury news, safety Ji'Ayir Brown (hamstring) and Luke Gifford (quadriceps) all would have been unable to practice had the team held a session. Receiver Ricky Pearsall (knee), linebacker Dee Winters (ankle), guard Dominick Puni (ankle) and defensive lineman Keion White (groin, hamstring) all would have been limited.

Shanahan also said tight end George Kittle is set to have surgery on his ruptured Achilles tendon on Wednesday. Kittle went on injured reserve Tuesday and tight end Brayden Willis was signed from the practice squad.

AP NFL: https://apnews.com/hub/nfl

FILE - San Francisco 49ers middle linebacker Fred Warner is carted off the field during the first half of an NFL football game against the Tampa Bay Buccaneers in Tampa, Fla., Oct. 12, 2025. (AP Photo/Jason Behnken, File)

FILE - San Francisco 49ers middle linebacker Fred Warner (54) runs to the locker room after pregame warm-ups before an NFL football game against the Tampa Bay Buccaneers on Oct 12, 2025, in Tampa, Fla. (AP Photo/Peter Joneleit, File)