A large majority voted for the House Ethics Board to look into Rep. Madison Cawthorn’s alleged scheme with cryptocurrency and his possible bad behavior with a staff member.
Cawthorn (R-NC), who failed to win his re-election campaign earlier this month, is charged with insider trading linked to the Let’s Go Brandon coin.
Authority
The council said the following in a press release:
“The Investigative Select Committee shall have authority to determine whether Cawthorn incorrectly encouraged a cryptocurrency wherein he may have had an unrevealed monetary stake and engaged in an improper correlation with a member of his congressional delegation.”
The announcement stresses that a probe is not a pronouncement of guilt. Rep. Veronica Escobar (D-TX) will lead the panel.
Jordan Libowitz, director of communications for Citizens for Ethics and Responsibility in Washington, praised the committee’s move to examine Cawthorn’s promotion and claimed financial interest in the viral cryptocurrency.
However, he cautioned the panel doesn’t have much time to conduct its study after Cawthorn’s primary defeat to North Carolina state Sen. Chuck Edwards last week.
NEW: Multiple government watchdog groups told @dcexaminer that Madison Cawthorn may have implicated himself in an insider trading scheme.
The watchdogs said an SEC and DOJ investigation into this matter is warranted.
— Andrew Kerr (@AndrewKerrNC) April 26, 2022
Libowitz informed the Washington Examiner that House Ethics should investigate.
The committee’s unanimous vote to investigate Cawthorn was significant, said Dylan Hedtler-Gaudette of the Project on Government Oversight.
Hedtler-Gaudette told reporters that Cawthorn may have engaged in insider trading.
Allegations
Sen. Thom Tillis (R-NC) asked the House Ethics Committee to investigate allegations that Cawthorn traded on inside information about LGBCoin.
The Washington Examiner was warned by a number of government watchdog groups that Cawthorn may have done insider trading.
This was when he tweeted “LGB legends. Tomorrow we travel to the moon!” in response to an Instagram photo of him and the creator of the meme coin, James Koutoulas, on December 29.
Insider trading by a member of Congress is a serious betrayal of their oath, and Congressman Cawthorn owes North Carolinians an explanation. There needs to be a thorough and bipartisan inquiry into the matter by the House Ethics Committee. #ncpol https://t.co/3s1UJMk1tj
— Senator Thom Tillis (@SenThomTillis) April 27, 2022
The next day, NASCAR driver Brandon Brown announced Koutoulas would be his 2022 sponsor, prompting the cryptocurrency’s value to surge by 75%.
LGBCoin references the “Let’s Go Brandon” slogan, mocking Joe Biden. Koutoulas said Cawthorn last exchanged the coin three weeks before the announcement.
Cawthorn has never submitted financial reports detailing his acquisition of LGBCoin, which members of Congress must do when buying more than $1,000 of any cryptocurrency.
Both Cawthorn and Koutoulas later maintained the LGBCoin deal with Brown was public information in early December when the senator exchanged the coin.
Cawthorn and Koutoulas couldn’t provide paperwork demonstrating the sale was known in early December.
Craig Holman, a lobbyist for Public Citizen, told reporters that Koutoulas’s statement claiming Cawthorn traded the meme coin before signing its contract with Brown made him even more worried that Cawthorn had inside information.
Holman added Cawthorn’s purchase of LGBCoin before the NASCAR endorsement announcement raises suspicions of insider trading.
If Cawthorn had nonpublic information that would have raised LGBCoin’s value, he might have engaged in insider trading.
