Judge targets central figures in LIBRA scandal with asset freeze; Milei’s financial ties under review

The court authorized lifting banking secrecy protections to grant investigators access to Milei's financial transactions amid LIBRA probe.

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An Argentine federal judge has ordered the freezing of assets belonging to key figures behind the LIBRA memecoin project as investigators examine potential fraud linked to the digital token’s promotion, including scrutiny of financial operations tied to President Javier Milei and his sister, Karina Milei, local media reported on May 15.

Judge María Servini issued the ruling on May 14 as part of a broader probe into a suspected pump-and-dump scheme involving LIBRA. The memecoin gained global attention after Milei publicly promoted it on social media in February.

The judge also authorized the lifting of banking secrecy protections for both Milei and his sister, allowing investigators to access their financial transaction history for signs of irregular ties to the project’s backers.

Surveillance footage fuels suspicion

On Feb. 14, Milei tweeted in support of LIBRA from his official account, describing it as a pathway to financial freedom. The endorsement triggered a wave of retail investment, which took the token’s market cap to over $4.5 billion.

However, the token’s price collapsed more than 85% and its liquidity vanished within days of the endorsing tweet, prompting allegations of market manipulation, insider profiteering, and systemic fraud. Public trust in Milei’s administration cratered after the scandal.

According to the case file, Novelli acted as a central figure in the scheme, facilitating connections between the presidential circle and Hayden Davis, a foreign financier who helped seed the project. Authorities have also issued an Interpol notice seeking Davis’ arrest.

Novelli rented a set of bank safety deposit boxes just 10 days before Milei’s tweet. Surveillance footage published by media outlets later showed Novelli’s mother and sister removing large bags from those boxes the morning after the endorsement went live.

According to a report by the Federal Police’s Anti-Money Laundering Division, the weight and handling of the bags suggest they may have been filled with large quantities of cash.

A local media report noted that the bags appeared empty upon arrival but were “visibly heavier” as the women exited, prompting suspicions of cash withdrawals tied to the LIBRA scheme.

Asset freeze and political fallout

Judge Servini’s asset freeze applies to Novelli, Manuel Terrones Godoy, and Sergio Morales, three individuals identified as central actors in the scheme.

The 90-day measure bars the sale or transfer of properties and vehicles to maintain the accused individuals’ financial footprint while prosecutors investigate alleged financial crimes.

LIBRA was marketed as a digital alternative for Argentines seeking to escape inflation and currency controls. Critics have since accused the project of operating without transparency and leveraging political influence to draw in unsuspecting investors.

Milei has denied any personal gain from the venture and deleted the tweet promoting LIBRA amid the backlash. The presidency has not responded to the latest judicial actions, but the investigation into financial links between his inner circle and the token’s promoters continues to escalate.

Opposition lawmakers are now calling for an independent inquiry into the president’s involvement and whether his public endorsement constituted abuse of office or market manipulation.

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