Despite no longer being front-page news, the investigation into the $LIBRA crypto scandal involving President Javier Milei and members of his inner circle is still trudging along.
The Argentine judiciary’s investigation since early 2025 focused on determining the sequence of events and whether criminal acts were committed. Another key aspect was determining who the affected parties were, as the token was followed by investors worldwide. Many of them filed legal complaints, requesting to be part of the class action, as they had been victims of a scam.
While the judiciary initially accepted their claims, their situation could be on the verge of shifting rapidly.
Last month, a judge decided to remove the traders who were part of the plaintiff.
According to the ruling, the five men — Juan Patricio Marchetto, Alan Vega, Matías Alejandro Paris, Braian Emanuel Quintero, and Martín Romeo — were excluded on the grounds that the magistrate described the cryptocurrency as a “memecoin,” meaning that investing in it carried inherent risk.
President Javier Milei had previously claimed that the $LIBRA token was a tool to “help small and medium enterprises.”
The decision means the investors who claim they were defrauded will no longer have access to the case file or be able to request that new evidence be admitted.
The investors appealed the decision, with the Federal Appeals Chamber set to decide whether the alleged victims of the $LIBRA crypto scandal can stay on. The ruling could happen as early as next week.
The ramifications could be meaningful. If their request is denied, the only official avenue to move the investigation forward is prosecutor Eduardo Taiano, who has been accused of failing to advance the case.
What is $LIBRA?
On February 14, 2025, Milei made an X post supporting a then-unknown cryptocurrency token called $LIBRA, prompting many investors to buy it.
The post said the project would allow investors to fund small businesses and contained what is known as a “contract number” that allows would-be buyers to find the cryptocurrency, which was not listed on major trading platforms.
The token soared right out of the gates, eventually surpassing US$5, but it cratered to virtually nothing over the next few hours after its developers withdrew between US$80 million and US$100 million — a maneuver known as a “rug pull.”
On May 13, prosecutor Eduardo Taiano ordered information gathering for an asset discovery. The investigation is focused on Milei; his sister and presidency secretary Karina; and three other men: Sergio Morales, Mauricio Novelli, and Manuel Terrones Godoy.
Morales was an advisor for Argentina’s National Securities Commission (CNV, by its Spanish acronym) who resigned amid the scandal. Mauricio Novelli and Manuel Terrones Godoy are businessmen who were present at a meeting between Milei and U.S. businessman Hayden Davis, one of the key figures in $LIBRA, in October 2024.
They had all met previously at Tech Forum, an event organized by the two businessmen in Buenos Aires.
The investigation is looking into Morales, Novelli, Terrones Godoy, and Davis. While Milei is being investigated for his role in the Argentine $LIBRA case, he has not been charged with any crime so far. A complaint lodged by the affected investors was formally accepted and incorporated into the criminal case in mid-2025.
The exclusion of the alleged victims
Judge Marcelo Martínez de Giorgi rexcluded the five investors from the case as alleged victims in early July.
The judge granted Novelli and Terrones Godoy’s motion asking the court to declare an “exception,” meaning that the plaintiffs could not state a claim upon which relief could be granted.
Martínez de Giorgi determined that the evidence failed to demonstrate that the complainants had been “particularly harmed,” that the ownership of the virtual wallets was not determined, and that $LIBRA was a memecoin — meaning it “constitutes a highly volatile activity involving risk assumed” by the traders.
Maximiliano Ferraro, a deputy from the Coalición Cívica and head of the $LIBRA investigative commission, suggested the ruling was linked to the Senate’s approval of Martínez de Giorgi’s wife, Ana María Cristina Juan, as a federal judge in Hurlingham, Buenos Aires province.
Her nomination had been submitted by Milei and was backed by senators from the ruling party La Libertad Avanza (LLA) and allied parties.
“It’s a classic case of returning favors,” Ferraro claimed in July.
The traders appeal
Novelli and Terrones Godoy had unsuccessfully tried to remove the plaintiffs from the case on four separate occasions. They even filed a complaint to the Supreme Court, which was rejected on December 4, 2025.
Last week, Marchetto, one of the plaintiffs, appealed Martínez de Giorgi’s decision to the Federal Appeals Chamber.
In his 13-page appeal, which the Herald has seen, Marchetto argued that his status and that of two others as plaintiffs had already been determined and upheld in three successive instances, including the Supreme Court.
Marchetto also disputed Martínez de Giorgi’s characterization of the $LIBRA incident as a mere failed speculative investment in a “memecoin.”
According to Marchetto, Novelli’s own defense — which is set out in Martínez de Giorgi’s ruling — contains a “contradiction that does not stand up to the most basic logical analysis.”
Novelli’s defense maintains that $LIBRA was a “genuine and legitimate project” that was “intended to finance small and medium-sized Argentine enterprises.” At the same time, they argue that it was merely a memecoin — “a purely speculative asset with no productive basis.”
“Both statements cannot be true at the same time,” Marchetto added.
Marchetto added that there is concrete evidence of a fraudulent scheme, given the evidence gathered in the case. This includes official expert reports, reports from the Federal Police and the Cybercrime Prosecutorial Unit, and even telephone calls between Novelli and Milei.
The presentation also disputed the judge requirement that they present conclusive proof of ownership of the non-Know Your Customer (KYC) virtual wallets, which do not validate their users’ identities.
According to Marchetto, that request contradicts the standard set by the Federal Chamber, which deemed that the screenshots, links, and video footage that they provided were enough to prove that the complainants were the owners.
He also said that the plaintiff has been “the main — and, in certain areas, only — driving force behind research” and that prosecutor Eduardo Taino’s investigation “has been passive, to say the least.”
The accused have also responded. Novelli submitted a statement through his lawyer, Daniel Rubinovich, last Tuesday challenging the investors’ claims. In the document, he argued that the victims “were not defrauded” but rather took a risk inherent to their status as market investors.
The businessman’s defense team also sought to exonerate the president of criminal liability for the post he published on the social media platform X to announce the launch of $LIBRA.
According to Rubinovich, the post is “legally and criminally irrelevant.”
