Should Crypto Ditch Memecoins?

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Late last Friday, Argentine President Javier Milei tweeted a contract address for a “country-supporting” memecoin called LIBRA which shot up to an FDV of $4.5B within an hour, before collapsing. Milei quickly retracted support for the token, claiming he wasn’t promoting the token but simply sharing it. Understandably, Crypto Twitter was outraged by the series of events and the investigation began over the weekend, with details coming to light about how the launch had been orchestrated by a “fund manager” named Hayden Davis of Kelsier Ventures.

Davis admitted to withdrawing ~$100M from LIBRA’s liquidity pool, framing it as a business failure, not a scam. Over the week, text messages from Davis obtained by CoinDesk alleged he bragged about “controlling” Milei via payments to Milei’s sister, Karina, though he later denied this. The fallout didn’t stop there, though, with many taking to Twitter to declare memecoins over and scrutinizing the involvement of Solana protocols Jupiter and Meteora, where insiders were accused of knowingly profiting from LIBRA. As a result, Meteora’s CEO resigned. LIBRA’s disaster even bled over to traditional markets which saw the Argentinian Stock Index, Merval, crash more than 5% on Monday’s market open. As expected, earlier this week, an Argentine judge was assigned to investigate Milei and the promotion of the token.