The Argentine Federal Judiciary has ordered the freezing of assets belonging to U.S. promoter Hayden Davis and two intermediaries suspected of being involved with the collapsed Libra token, deepening the investigation into one of Latin America's largest cryptocurrency scandals.

Judge Marcelo Martínez de Giorgi reportedly issued this order, which covers the digital wallets, bank accounts, and real estate assets of Davis, Argentine operator Orlando Rodolfo Mellino, and Colombian trader Favio Camilo Rodríguez Blanco.

Prosecutors indicated that the asset freeze is necessary to prevent the transfer of any assets that may represent fraudulent proceeds, while investigators are working to trace the flow of funds estimated to be between $100 million and $120 million.

The ruling requires the National Securities Commission (CNV) to notify all virtual asset service providers in the country to ensure that the asset freeze extends to local crypto platforms.

At the heart of the case is the Libra meme coin, which gained widespread attention in February when Argentine President Javier Milei briefly promoted Davis as a blockchain and AI consultant in a social media post. Within hours, the token's price skyrocketed and then plummeted, resulting in losses of about $250 million for over 40,000 retail investors.

Davis, as a promoter of other meme coins, is seen as a central figure in this meme coin scam. In May of this year, a U.S. judge in New York froze $57 million in USDC stablecoins related to Davis and his partners at the now-defunct Meteora exchange.

The judge later lifted the freeze, ruling that Davis and former Meteora CEO Ben Chow did not attempt to transfer funds, and that there remains a possibility for investors to be compensated.

A lawsuit initiated by U.S. and Latin American investors accuses Davis, Chow, and others of coordinating a "pump and dump" scheme. The plaintiffs cite the RICO Act, claiming that Libra and Davis's other project, M3M3, are part of a continuing pattern of organized fraud.

Although Milei has not faced criminal charges, the Argentine investigation has drawn widespread attention, as Davis's cryptocurrency transfers reportedly coincide with high-level political meetings.

Court documents describe intermediaries exchanging tokens for cash during Davis's meeting with Milei at Casa Rosada, further fueling the "Crypto Gate" controversy that has dominated headlines in Argentina.

Nevertheless, Judge Martínez de Giorgi emphasized that the asset freeze will remain in effect only for as long as necessary to preserve evidence and safeguard the potential compensation for investors.

Coordinated actions in Buenos Aires and New York mark a rare case of courts on two continents taking action against the same blockchain asset.

For regulators, the Libra scandal highlights how cross-border enforcement and political disputes are increasingly intertwined with cryptocurrency investigations.

Despite being embroiled in this scandal, Milei's Libertarian Forward party won in the midterm elections, making the president a leading contender for the presidential race in October 2027.

Related: Brazil classifies stablecoin payments as foreign exchange transactions, introducing new regulations to strengthen oversight

Original: “Argentina Escalates Crackdown in Libra Scandal, Freezes Assets”

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