Argentine President Javier Milei’s administration is facing its most turbulent period yet, as a cascade of corruption scandals, economic anxieties, and political infighting threaten to upend the country’s fragile recovery. What began as hope for a maverick outsider—someone who could rescue Argentina from years of hyperinflation and break the mold of entrenched political corruption—has quickly devolved into a storm of public distrust and market volatility.
When Argentines cast their ballots for Milei, they did so with two main expectations: that he would tame the country’s runaway economy, and that he would stand apart from the so-called “caste” of corrupt politicians who have long plagued Argentine politics, according to Buenos Aires Times. But recent events have left both assumptions in doubt. The latest scandal—allegations of graft in the National Disability Agency—joins a growing list of controversies, including a multimillion-dollar tender for the Paraná River waterway reportedly steered to benefit a single company and, most notably, the $LIBRA cryptocurrency scandal that has personally implicated the president.
The LIBRA affair exploded onto the scene in February 2025 when Milei publicly endorsed the $LIBRA token. The crypto’s value soared to $4.50 before collapsing, leaving roughly 50,000 investors nursing losses that exceeded $250 million, as reported by CryptoSlate and AInvest. The fallout was immediate and severe: Argentina’s stock market dropped 5% in a single day, and the S&P Merval index has since plummeted over 40% year-to-date, with single-day losses of up to 7.5% in August 2025.
For a while, the investigation into the LIBRA scandal languished. Initially launched in April, the commission tasked with probing the affair was swiftly paralyzed by bureaucratic obstacles. But on August 28, 2025, Argentina’s opposition parties—representing 136 of the Chamber of Deputies’ 257 lawmakers—voted to reactivate the investigation, seizing on fresh allegations and public outrage. The move came just weeks before Argentina’s crucial midterm elections, scheduled for October 27.
The catalyst for this renewed scrutiny was a series of leaked audio recordings belonging to Diego Spagnuolo, a former presidential attorney and government official. The tapes, which Spagnuolo has confirmed as authentic, implicate both President Milei and his sister Karina in a separate bribery scheme involving cash-for-favors. These revelations have only fueled the public’s anger. On August 27, during a public appearance, protesters hurled lettuce and rubbish at Milei—a symbolic gesture that made headlines across the nation and underscored the mounting unrest.
Maximiliano Ferraro, a legislator from Civic Coalition ARI and now head of the revived investigative body, explained the rationale behind the renewed probe: "Questions remain over whether insider trading took place." The commission has set a reporting deadline of November 10, just weeks after voters head to the polls. With the opposition emboldened and the public increasingly skeptical, the stakes for Milei’s administration could hardly be higher.
It’s not just the LIBRA scandal or the bribery tapes that are weighing on the president. Allegations that Karina Milei siphoned funds from the National Disability Agency have further eroded trust. The Universidad Di Tella index, which measures public confidence in the government, dropped 13.6% in August 2025 compared to July—its lowest level since Milei took office, according to Buenos Aires Times. His approval ratings have now dipped below 40%, a stark contrast to the optimism that greeted his presidency just months earlier, as noted by AInvest.
Economically, the government has managed some short-term wins. Monthly inflation, which had been running rampant for years, slowed to 2.7% by late 2024, and a $20 billion loan from the International Monetary Fund helped stabilize the fiscal position. But these gains are proving fragile. Inflation rates have begun to creep upward again, from 1.5% in May 2025 to 1.9% in July, with estimates suggesting 2% or higher in August. To keep the peso afloat, the central bank has hiked interest rates to more than double the annual inflation rate—a move designed to dissuade investors from betting against the currency but one that’s stifled economic activity and exacerbated hardship for ordinary Argentines.
Meanwhile, the government’s efforts to roll over $5 trillion in debt under the TAMAR program have faltered, and the central bank’s decision to raise reserve minimums to 53.5% has only deepened the malaise. Argentina’s EMBI country risk index has climbed to 829 basis points, its highest since April 2025, signaling to investors that default risks are rising fast, according to AInvest.
For foreign investors, all this spells trouble. Political instability, policy reversals, and regulatory uncertainty have combined to make Argentina a high-risk bet. Direct investment inflows in Milei’s first year have fallen short of $1 billion, far below the levels needed to jumpstart sustainable growth. The LIBRA scandal, in particular, has cast a long shadow over the government’s credibility. As AInvest put it, "the LIBRA scandal’s impact on investor sentiment is evident."
The broader implications for Argentina’s democracy are equally sobering. History offers a cautionary tale: in the 1990s under Carlos Menem and in the mid-2000s under Néstor and Cristina Fernández de Kirchner, corruption scandals were rampant, but as long as the economy was delivering, voters looked the other way. Only when the benefits faded did the ghosts of corruption return to haunt those leaders. The question now is whether Milei can deliver enough tangible results to keep public anger at bay—or whether the cumulative weight of scandal and economic strain will prove too much.
Investors, too, are watching closely. As the October midterms approach, they’re less concerned with the outcome of the vote than with what the government will do in its aftermath. Will Milei be able to pivot from a defensive posture—focused on avoiding a currency crisis—to a more proactive agenda that delivers growth and jobs? Or will the administration, battered by scandal and public mistrust, find itself paralyzed?
For now, the path forward is anything but clear. The revived LIBRA investigation, mounting corruption allegations, and economic headwinds have left Milei’s administration on the defensive. The coming weeks will test not only his political survival but also Argentina’s ability to navigate yet another chapter of uncertainty and upheaval.
As October’s elections draw near, both the public and the markets are bracing for what could be a decisive turning point—one that will determine whether Argentina can finally break free of its cycles of crisis, or whether history will repeat itself once again.
