Industry voices warned that politically endorsed cryptocurrencies must adopt stronger investor protections and liquidity safeguards to prevent another major market collapse.
Investor sentiment remains shaken after the Libra (LIBRA) token, which was endorsed by Argentine President Javier Milei, suffered a $4 billion market cap wipeout due to insider cash-outs.
According to blockchain analytics firm DWF Labs, at least eight insider wallets withdrew $107 million in liquidity, triggering the massive collapse.
Libra/USDC market cap. Source: Kobeissi Letter
To avoid a similar meltdown, tokens with presidential endorsements will need more robust safety and economic mechanisms, such as liquidity locking or making the tokens in the liquidity pool non-sellable for a predetermined period, DWF Labs wrote in a report shared with Cointelegraph.
The report stated that tokens from high-profile leaders would also need launch restrictions to limit participation from crypto-sniping bots and large holders or whales.
“Limiting bot and whale activity is essential in