Cardano founder Charles Hoskinson has addressed the controversy surrounding the Libra token. He believes Argentinian President Javier Milei was not directly involved in it.

His statements strongly imply that better decisions and due diligence could have prevented the controversy.

Charles Hoskinson Speaks on LIBRA Token Scandal

According to Hoskinson, Milei’s advisors likely pitched the project as a good idea, possibly comparing it to other political tokens like Official Trump (TRUMP). However, those insiders orchestrated a scheme, profiting at the peak while leaving Milei to handle the fallout.

For context, last week, President Javier Milei’s promotion of the LIBRA token triggered a surge in its value. The market capitalization reached $4.5 billion. Yet, shortly after, its value plummeted by 95%, leading to significant investor losses.

Concerns arose over insider withdrawals of $107 million, prompting Milei to retract his endorsement. Amid growing concerns, Hoskinson weighed in on the situation in his latest YouTube video. 

“I think there are some people in that inner circle surrounding Milei himself who took advantage of his lack of knowledge of our industry,” Hoskinson said.

Hoskinson believes while Milei may not have been aware of the full details of the scheme, the controversy has nonetheless damaged his reputation.

However, this has escalated beyond Milei’s personal reputation, drawing legal scrutiny. Argentina’s Anti-Corruption Office (OA) has now launched an investigation into President Milei and his cabinet. 

Notably, Milei has requested the probe and formed an Investigation Task Force to examine the KIP Protocol and related entities. Furthermore, according to The Kobeissi Letter, international law firms are reportedly preparing massive lawsuits against President Milei.

How the LIBRA Scandal Affects Argentina’s Blockchain Future

Meanwhile, Hoskinson added that Argentina had the potential to be transformed through blockchain-based solutions. He added a few examples, such as voting systems, government budget tracking, supply chain management, and digital identity systems. 

Nevertheless, the Libra token controversy has severely damaged blockchain’s reputation in Argentina, creating a toxic perception of the technology. 

“The frustrating thing for me is that all Milei had to do is just let the blockchain industry come work with him, and the entire country could be revolutionized and transformed,” he stated.

As a result, political opponents are likely to use the scandal to block future crypto adoption in the public sector, associating blockchain with fraud rather than innovation.

Hoskinson stated that even before the Libra scandal, his team had concerns about working with Milei’s administration due to political instability and deregulation. 

He compared Argentina’s decision to eliminate its tax agency (AFIP) to the US shutting down the IRS, emphasizing the volatility and lack of institutional stability. 

With government agencies at risk of disappearing overnight, Hoskinson believes that long-term blockchain partnerships with the Argentine government are highly uncertain and difficult to establish.