Argentine Presidential Candidate Sued for Allegedly Promoting Crypto Ponzi Scheme

Argentine presidential candidate Javier Milei is being sued for allegedly promoting a crypto scam. In December last year, Milei posted to his 1.3 million Instagram followers in support of the crypto investment platform CoinX which promised investors huge returns.

Following a visit to CoinX’s Buenos Aires offices, Milei posted:

“They are revolutionizing the way to invest to help Argentinians with inflation. You can now simulate your investment in pesos, dollars or cryptocurrencies and earn a profit. Write them @coinx.world from me so they advise you with the best!”

The crypto platform that was promoted by the Argentine presidential candidate ceased operation after a warning by the National Securities Commission (CNV). The regulator stated on June 8 that CoinX had no legal right to operate in Argentina and ordered CoinX and CoinX World to cease all invitations for investments and close down operations.

CoinX claimed to be able to “beat inflation” and that its trades were automated with the help of artificial intelligence, bots and expert traders. It had a great social media following – 500,000 followers on Instagram – and promised returns of up to 8% per month. The platform had been operating for months only, its first Instagram post was on December 14, just days before Milei’s visit. It stopped paying investors in March.

Earlier, on January 19, CoinX released a statement refuting claims that it was running a Ponzi scheme. They claimed that Milei’s visit was to discuss “communication issues” and that investments were backed by Salvadoran legislation. The company’s headquarters are in El Salvador, the first country to adopt Bitcoin as legal tender.

According to local media, investors are holding Milei personally responsible for their losses. Investors – who deposited amounts ranging from $1000 to $10,000 – have lawyered up and are seeking compensation. The investors are being represented by Juan Pablo Chiesa who has previously worked on crypto-related cases. Chiesa revealed that investors are owed between 30 to 4 million pesos (about $300,000).

In a statement to the local paper Clarin, Chiesa comments on the case:

“Milei, in order not to be jointly and severally liable, he has to show me an advertising contract. If he has it and says that it is limited, he blocks me. But that does not exist.”

Milei is a Bitcoin supporter who has, in the past, referred to the central bank as “a scam”. He has since stated that he was not paid to promote the platform. Known for his social media antics, the lawmaker, who is one of the top three contenders for the presidency in next year’s election, has promised economic liberation for the South American nation which has one of the highest inflation rates in the world. It remains to be seen how the allegations against him affect his claim to the presidency.