Hayden Davis crypto scandal deepens as LIBRA memecoin faces fraud allegations

• Portnoy returned 6 million LIBRA tokens after concerns over transparency in promotions
• An investigation linked LIBRA and MELANIA token projects, revealing cross-chain fund transfers

The controversy surrounding the LIBRA memecoin continues to unfold as Argentina’s President Javier Milei faces intense scrutiny. In fact, just recently, Milei publicly denied knowing about the fraudulent nature of LIBRA, a cryptocurrency he had initially endorsed.

As expected, LIBRA, which briefly surged in popularity before collapsing, became the center of a scam.

Ongoing LIBRA memecoin scandal

Adding to the controversy, Barstool Sports founder Dave Portnoy came forward and revealed that he returned 6 million LIBRA tokens to the project’s founder, Hayden Davis.

In a recent X Spaces event on 16 February, Portnoy revealed that he received approximately 6 to 6.5 million LIBRA tokens as compensation for promoting the memecoin on social media.

However, since Davis asked him not to disclose that he was paid for the promotion, he returned the tokens. He said,

“I can’t accept coins if you don’t f*****g let me say you gave me coins, and I’m part of the project. So, I literally sent the coins back. This is all going on before any of this shit — before I knew this was a disaster.”

Needless to say, this situation has further raised questions about the legitimacy of memecoin projects and their endorsements.

Is there more to the story?

Portnoy also disclosed that he purchased additional LIBRA tokens and admitted to keeping them, even as their value plummeted. In fact, he stayed in touch with founder Hayden Davis as the project’s downfall unfolded.

Despite the chaos though, Portnoy believes Davis likely did not intentionally orchestrate a rug-pull. He is even speculating that Argentine President Javier Milei’s sudden withdrawal of support contributed to the collapse.

How is $MELANIA involved in this controversy?

Meanwhile, a joint investigation by blockchain analytics platform Bubblemaps and on-chain investigator Stephen Findeisen (CoffeeZilla) uncovered on-chain evidence linking the failed LIBRA launch to another controversial project, MELANIA – A sign that the same entity was behind both.

On X, Bubblemaps noted, 

“After analyzing cross-chain transfers and timing patterns, we’re highly confident this is the case.” 

Additionally, the investigation uncovered a complex web of interconnected wallet activities between the LIBRA and MELANIA projects, showing how one project’s funds financed the other through cross-chain transfers.

What’s next?

The LIBRA memecoin has sharply declined as a result of these allegations. According to DexScreener, it was trading at $0.3500 at press time, after dropping by 13.84% in the last 24 hours

As expected, this has further deepened the uncertainty surrounding an already controversial situation, with investors and industry experts now questioning the true nature of these projects and their broader implications for the crypto space.