LIBRA Event Reflection: Has a New Round of Disenchantment Begun?

Author: p不动了的Scof, ChainCatcher

Who is Manipulating LIBRA?

"The scythe" has shifted from retail investors to well-funded KOLs and institutions.

On February 15, a seismic event in the crypto market triggered by a political figure unfolded in Argentina. At 6 AM that day, Argentine President Javier Milei announced the launch of a meme coin called LIBRA through his official X account, revealing the contract address. Upon the announcement, the price of LIBRA skyrocketed to $4.61, with its market cap briefly surpassing $4 billion, and trading volume reaching $1.2 billion within 4 hours. However, this frenzy lasted only a few hours before taking a sharp downturn.

At 11:30 AM, Milei suddenly deleted the tweet and claimed he had no knowledge of the token's details, angrily accusing others of attempting to manipulate the market using his name. The price of LIBRA plummeted by over 85%, with its market cap shrinking to $418 million. On-chain data showed that eight wallets associated with the LIBRA team had cashed out $107 million by removing liquidity, with the largest single loss reaching $5.17 million. Nearly a hundred investors lost over $500,000, and the American law firm Burwick Law announced it would intervene for recovery.

The core of the incident gradually pointed to the issuer of LIBRA—the blockchain project KIP Protocol and its partner Kelsier Ventures. Although KIP co-founder Julian Peh insisted that Milei was not involved in the development, public records indicated that the KIP team had met with the president as early as October 2024 to discuss a blockchain financing plan named "Long Live Freedom." In January 2025, Hayden Davis, head of Kelsier Ventures, even entered the presidential office as a technical advisor for discussions.

Blockchain analysis platform Bubblemaps revealed that LIBRA shares a behind-the-scenes team with another political figure, Melania Trump, associated with the MELANIA token. Through cross-chain tracking, a wallet marked as 0xcEA profited over $2.4 million from LIBRA, and this address is linked to the operator of MELANIA, involved in multiple pump-and-dump schemes. Solayer developers further exposed connections between LIBRA market makers and Indian serial withdrawal scammer Arunkumar Sugadevan, who had laundered over $15 million.

On February 16, the Argentine presidential office issued an urgent statement, stating that Milei had requested the anti-corruption office to thoroughly investigate the involved companies and individuals, and a special investigation team was formed to trace the flow of funds. The opposition threatened to impeach the president on the grounds of "rug pull leading to the evaporation of national wealth." Under pressure, Kelsier Ventures promised to use $100 million of treasury funds to buy back and destroy LIBRA, but this was questioned as a crisis PR move.

As a leading aggregator in the Solana ecosystem, Jupiter was accused of having prior knowledge of LIBRA's issuance two weeks in advance. Its team clarified that they only verified the token due to the president's tweet and did not participate in any profit distribution. Meteora co-founder Ben Chow also denied receiving tokens, stating that they only provided technical support. However, YouTube journalist Coffeezilla exposed that the LIBRA team admitted to internal front-running trades, further damaging industry trust.

As of February 17, this farce had evolved into a multifaceted game of politics, law, and crypto technology.

Series of Controversies Exposing the True Anxiety in the Market

Currently, the community continues to monitor the developments of the incident, with some KOLs suggesting that bigger scandals may emerge in the future. Regardless of the outcome, what the industry should focus on now is reflection. Although many stories of rapid wealth accumulation have emerged under this model, its essence remains a game of speed.

The LIBRA incident has exposed the deep-seated contradictions and trust crisis within the cryptocurrency industry.

It is evident that user anger is not merely due to financial losses—people have long been accustomed to the volatility of the crypto market. However, when the president personally endorses something that crosses the line of trust, it shatters even the last veil of shared value consensus.

Moreover, with Solana, which has gained widespread recognition in this cycle, also starting to face its own troubles, it is now entangled in FUD.

For SOL holders, the rise of on-chain memes initially brought new development opportunities for SOL, attracting more attention and holders, thus promoting the growth of the Solana ecosystem. However, this incident has cast doubt on all of that. The price of SOL has significantly dropped, not only drastically reducing the assets of holders but also casting a shadow over the future development of the entire Solana ecosystem.

More importantly, for the true builders of the cryptocurrency community, the LIBRA incident is undoubtedly a heavy blow. Manipulation, fraud, and systemic harvesting? People are beginning to question whether this industry is moving towards decentralization and transparency or merely repeating the pitfalls of the traditional financial system. Some crypto KOLs bluntly stated, "pumping is destroying the industry."

Perhaps this is the true anxiety of the market.

Because of Anxiety, Demystification

"Retail investors don't need a real wealth effect; they just need it to appear as if there is a wealth effect."

In the past month, the market has been caught in the whirlpool of "hotspot harvesting." Each hotspot repeats the same script—traffic influx, price surges, liquidity withdrawal, and a sigh from most users.

Although we all know that PVP will not disappear, the game of speed will continue.

But at least at this stage, a new round of demystification in the crypto market may be about to begin.