Does Argentina Have More Effective Guard Rails?
Javier Milei seems to fancy himself an Argentine Señor Trumpanzee. Like Trump, he was a TV personality who was able to capitalize on a populist, anti-establishment image, and— again, like Trump— he’s known for his flamboyant, confrontational style and for using social media to bypass traditional media channels, appealing directly to his grievance-laden base. Both rail against existing economic structures, blaming what they claim to be corrupt and inefficient government practices for economic woes, both advocating for draconian changes, with a focus on reducing government intervention. Like Trump, Milei portrayed himself as a political outsider eager to shake up the system and his rise to power is attributed to widespread dissatisfaction with traditional political parties and leaders. They've garnered support from voters frustrated with economic conditions, taking advantage of high inflation and appealing to voters who feel left behind by the political and economic elites and who are easily influenced by conspiracy theories..
An economist and self-described anarcho-capitalist, Milei has been more extreme in his austerity prescriptions for Argentina, driving down inflation while drastically driving up poverty. Milei's approach to governance has been more ideologically driven, aiming for a quick, radical transformation towards a minimal state, whereas Trump's is more about leveraging economic nationalism to adjust existing systems.
And both are criminals— Trump more so— but Milei’s criminality and corruption are starting to come to the surface, right now because of crypto-fraud. While Trump's criminal activities span decades, from business dealings to political maneuvers, Milei's accusations are more recent and closely tied to his political career and economic policies. Trump's legal issues include tax evasion, fraud and election-related charges, whereas Milei's are predominantly linked to his brief time in politics, focusing on financial misconduct, self-enrichment and corruption.
Today, the Associated Press reported about the crypto-fraud charges against Milei, as of today, in criminal court.
On Friday, Milei posted on Twitter about $LIBRA, a coin that he said was aimed at “encouraging economic growth by funding small businesses and startups.”
He deleted the post a few hours later and the value of the currency collapsed, causing millions of dollars in losses to its brief investors, according to financial site Dexscreener.
The coin, developed by KIP Protocol and Hayden Davis, could be obtained by accessing a link that directed users to a website called vivalalibertadproject.com, referring to the well-known phrase with which Milei closes speeches and messages on his social media.
… Jonatan Baldiviezo, a lawyer and one of the plaintiffs, told the AP that they saw an illicit association to commit “an indeterminate number of frauds” in the episode. “Within this illicit association, the crime of fraud was committed, in which the president’s actions were essential,” he said.
Baldiviezo signed the petition with Marcos Zelaya, another lawyer; the engineer María Eva Koutsovitis; and the economist Claudio Lozano, who presided over the Argentine Central Bank during former president Alberto Fernández’s administration. Criminal justice is expected to assign a judge to the case or refer it to a prosecutor for further investigation on Monday.
The plaintiffs saw in Milei’s action an operation known in the crypto world as “rug pull.” This occurs when a developer launches an attractive token to lure investors but later abandons it after funds become overpriced, making the tokens worthless. Baldiviezo also added that Milei violated the Public Ethics Law.
“The President shared a post on his personal accounts announcing the launch of KIP Protocol’s project, as he does daily with many entrepreneurs who wish to launch projects in Argentina to create jobs and attract investments,” the President’s Office said.
After deleting the post, Milei said on Twitter he was unaware of the currency’s development and blamed his political opponents for trying to exploit the episode. “I was not aware of the details of the project, and after getting informed, I decided not to continue promoting it (which is why I deleted the tweet),” he said.
… Hayden Mark Davis, one of KIP Protocol’s representatives who met with Milei, blamed the president for the crypto currency’s collapse in a video posted on his social media on Saturday.
“Despite prior commitments, Milei and his team unexpectedly changed their position, withdrawing their support and deleting all previous posts on social media,” Davis said.
Remember, Trump spent much of his first term trashing cryptocurrency, calling Bitcoin a “scam” and saying it was “based on thin air.” His Treasury Secretary, Steven Mnuchin, even floated the idea of severe restrictions on digital assets. But as soon as he saw a way to personally profit, his tune changed. By 2024, Trump had done a complete 180, openly courting crypto billionaires, taking donations in digital currency, and promising deregulation. His NFT grifts and the MAGA Coin scheme were just the start— his embrace of the industry wasn’t about policy; it was about figuring out how to extract as much money as possible from the crypto gold rush.
Milei’s scandal isn’t unlike how Trump and his 3 crooked sons handle crypto: reckless promotion, shady backroom deals and a complete and dangerous disregard for the financial destruction left in his wake. The only real difference at this point is that Trump has decades of experience running scams— from Trump University to the Trump Foundation. He knows how to turn the machinery of government into a personal ATM. If Milei is learning the ropes of crypto-fraud, Trump has already written the playbook.
This morning, the NY Times ran a guest essay by professors Henry Farrell and Abraham Newman, Crypto Gamblers, Tech Oligarchs, Wall Street Opportunists. What Could Go Wrong?, writing that “Over the past two decades, America has built an unprecedented arsenal of economic security tools that have anchored U.S. foreign policy. Republican and Democratic administrations together developed a shared understanding of the world, and how best to pursue America’s interests. Economic security officials worked across administrations, gradually developing grand ambitions of a global order founded on financial sanctions, export controls and development of crucial technologies. Each new administration built up the economic weapons it inherited from the last and encouraged its successors to keep building the structures of American economic power.”
They warned that “We are about to find out what happens when those structures are controlled by a disruptive administration— and what happens when that administration inherits the weapons without the accompanying sense of responsibility… [T]he problem isn’t just that Trump ricochets through policy positions like a ball on a roulette wheel. It’s that his administration is set to become a casino where crypto gamblers, tech oligarchs and Wall Street opportunists compete with security hawks for influence. U.S. policy will then depend on which pocket on the wheel Trump comes to rest. These different factions have different understandings of America’s interests. Should the nation rely on crypto technologies that were designed to resist government control? Should it loosen or strengthen restrictions on the export of A.I. and semiconductors? Should it strike convenient bargains with wealthy autocratic regimes? At least some of these would depart sharply from the past security consensus. It used to be that while Democrats and Republicans fought bitterly over many policy questions, both agreed that the national interest depended on building up power over global finance and technology.
It is already clear that there will be fewer constraints on Trump in his second term. In 2020, he issued an executive order that would have effectively banned TikTok as a threat to national security. Now he appears to want a deal that would keep TikTok alive (he changed his mind around the time he talked to Jeff Yass, a major investor in TikTok’s parent company, although he denies having discussed TikTok at the meeting).
Trump’s love affair with crypto sits awkwardly with his enthusiasm for American power. He has promised to make crypto into a national policy priority, and even issued his own crypto memecoin. He appointed a crypto investor, David Sacks, as “crypto and A.I. czar,” and nominated as commerce secretary Howard Lutnick, whose company, Cantor Fitzgerald, has been a major supporter of the crypto stablecoin Tether.
But crypto’s interests are at odds with U.S. financial and technological power. Crypto makes it easy for rogue states to move money across borders and promises that technological decentralization can provide alternatives to government power. Traditional banks worry about the possible fallout from crypto services’ lackadaisical approach to money laundering and enforcing financial sanctions.
…[T]his administration will inexorably weaken America’s economic security. Sanctions and other measures could well, sometimes, be applied indiscriminately against countries, organizations and individuals that displease the president. Those who fear Trump’s fickleness and wrath will have every reason to detach themselves from connections with the United States to limit the damage.
Countries and businesses will likely pay Trump his tribute, or pretend to, to avoid tariffs, sanctions and export controls. But they will also know the United States is no longer entirely reliable. They are likely to be hurt not only by Trump’s deliberate actions but also by the foreign-policy mistakes that proliferate as America’s administrative state withers from within. We are likely to see the erosion of the markets that underpin U.S. strength, as one-way tributes displace two-sided relationships in a multilateral world. Global businesses will diversify their supply chains, applying the same risk calculations to American exposure that they once applied to dealings with tinpot kleptocrats.
America’s adversaries have long found it hard to persuade America’s allies to defect from America’s economic networks. Trump’s second term has changed their calculus— now even European allies are quietly talking about moving closer to China. It’s increasingly hard to see the benefits they get from their ties to America, and increasingly easy to see the costs.
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