Argentinian President Faces Fraud Charges in $LIBRA Scandal

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Good Morning.

As political titans dip their toes in memecoin mayhem, the crypto stage is turning into a surreal political circus. While the “new” SEC says that memecoins are likely not securities, Javier Milei is facing fraud charges in Argentina.

In Today's Email:

• What Matters: Argentina President Faces Fraud Charges in $LIBRA Scandal 🔎 

• Product: State Street Eyes Digital Asset Custody in 2026 🚢 

• Charts: Bitcoin Activity Hits 12-Month Low 📉 , BNB ❤️ Memecoin

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WHAT MATTERS

Argentinian President Faces Fraud Charges in $LIBRA Scandal

State of play: Argentinian President Javier Milei is now facing fraud charges in connection with the collapse of the $LIBRA. a digital asset that lost 95% of its value from its peak.

• A group of Argentinian lawyers brought the allegations, including a former head of Argentina’s Central Bank.

• The allegations center on Milei’s withdrawal of his support for the token, which critics claim triggered a massive sell-off.

• Milei has denied any advance knowledge of the token project and maintained his innocence. His administration announced an immediate investigation by the Anti-Corruption Office to examine any improper conduct within the government.

Project advisor Hayden Davis, who was responsible for ensuring liquidity and managing fees for $LIBRA, defended his role in the project.

• He asserted that he never intended to benefit personally from the funds and announced plans to reinvest up to $100M into buying back and burning the token.

• He also claimed that Milei’s sudden removal of his endorsement led to panic selling among investors.

• However, data indicates that significant selling had already occurred due to prior reports of insiders cashing out $107M in trading fees and liquidity pool funds.

In a related development, Dave Portnoy shared additional details during an X Space session. Portnoy explained that he had been set to join the project as an advisor and even purchased tokens at launch.

• However, after being gifted around 6M tokens, he decided to return them when advised by Davis not to disclose the gift publicly.

• Portnoy expressed frustration with the unfolding events and suggested that the project's internal dynamics shifted once Milei withdrew his endorsement.

• Meanwhile, Jupiter has distanced itself from the controversy, clarifying that it had no prior involvement in the project and that it only verified the token’s authenticity.

What’s next: Judicial hearings and potential impeachment proceedings loom, while regulatory bodies may tighten oversight on crypto projects.

For builders and investors: This incident reminds us the need for caution in projects with high-profile backers and complex tokenomics.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

PRODUCT OF THE WEEK

State Street Eyes Digital Asset Custody in 2026

State Street is set to launch a digital asset custody business in 2026, marking a significant shift for Wall Street banks traditionally cautious about directly handling crypto.

• The move comes in the wake of the SEC scrapping the controversial SAB 121 accounting guidance.

• SAB 121 had imposed costly compliance measures on firms holding crypto assets.

• State Street aims to offer both custody and transfer agency services for tokenized assets, such as tokenized Treasurys.

• The product is still waiting for Federal Reserve approval.

• This initiative builds on the firm's existing crypto infrastructure, including its roles in fund administration and its previous partnership with Lukka.

Other cool products:

• Limitless, a new prediction market on Base.

• 10kswap, an AMM protocol on Starknet Mainnet.

• XBR Protocol, a DeFi ecosystem on major EVM blockchains.

• GLOBAL GAINS, a BNB staking platform with refund system.

• Hashstack, a permissionless zk-native money market protocol.

CHARTS OF THE WEEK

Bitcoin Network Activity Hits 12-Month Low

State of play: Bitcoin network activity has fallen to 12-month lows, with a 7-day moving average of 330,000 transactions, down 55% from its peak of 730,000.

• Transaction fees have stabilized at around $500,000, compared to the higher fees seen during active periods.

• Speculative trading activity has migrated to other blockchain ecosystems like Solana for memecoin trading and Base for AI agent tokens.

• This decline is driven by reduced activity from protocols like Runes and Ordinals.

• This suggests that Bitcoin is shifting back to being primarily used for monetary transfers.

• The decrease raises questions about long-term network utilization and fee sustainability as block rewards diminish.

Our take: The shift away from speculative trading on protocols like Runes and Ordinals towards specialized networks like Solana and Base highlights a maturation of BTC's use case, emphasizing its role as a medium for transfers and store of value.

BNB Chain Optimizes for Memecoin Trades Amid 400% Gas Fee Surge

State of play: BNB Chain is shifting its focus to prioritize memecoin transactions amid a 400% surge in gas fees, which have reached nearly $15M in the past week, more than double Ethereum's total.

• The platform introduced an optimization that allows validators to collect more bids per 3-second block, ensuring faster processing.

• BSC's fees surged 114% over the past 7 days, according to Nansen analyst.

• This update comes as rising BNB prices, a pause in Binance's legal issues, and a wave of new memecoins.

Our Take: While this move capitalizes on the current speculative frenzy, it also raises important questions about long-term sustainability and equitable access for all users.

QUICK BITES

• Blockchain.com takes step towards IPO.

• Strategy could be eligible for S&P 500 inclusion in June.

• CalSTRS pension fund reports holding $83M in MSTR shares.

• Bubblemaps links single entity to Libra and Melania memecoins.

• Dave Portnoy reveals he returned 6M $LIBRA to project's founder.

• US Crypto Task Force to focus on delivering national Bitcoin reserve.

• BNB Chain will prioritize memecoin transactions as gas fees surge 400%.

• Argentinian President Javier Milei charged with fraud over $LIBRA scandal.

NOTEWORTHY READS & MEME

• Crypto Stream’s read on $SQD.

• Cheezy’s read on Institutional Investing.

• Hitesh’s read on $TRUMP dune analytics.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.