September 27, 2022

CRYPTO CROOK: Rep. Madison Cawthorn accused in insider trading scheme

CRYPTO CROOK: Rep. Madison Cawthorn accused in insider trading scheme

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Rep. Madison Cawthorn (R-NC-11) was named in a class-action suit filed against the creator of the Let’s Go Brandon crypto meme coin today. Filed April 1st by jilted investor Eric De Ford, the suit lists LGBCoin founder James Koutoulas, NASCAR driver Brandon Brown, and conservative pundit Candace Owens as co-defendants. Cawthorn is named as a “celebrity endorser” for his role in the social media promotion and endorsement of the embattled cryptocurrency.

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Here’s a picture posted on Koutoulas’ Instagram on December 29th, showing Cawthorn at a party with the founder,

It isn’t the photo – but Cawthorn’s comment under it – that’s raising eyebrows.  Though “Tomorrow we go to the moon” may seem innocuous, Dylan Hedtler-Gaudette, government affairs manager for the Project on Government Oversight, believes it’s an indication that Madison Cawthorn had prior knowledge that the controversial crypto was going to increase in value the next day.

On December 30th, NASCAR’s Brandon Brown announced publicly that he and Brandonbilt Motorsports (also named as a defendant in the lawsuit) were partnering with LGBCoin as sponsors in 2022. Shortly after, the stock surged 75% to a valuation of $570 million.

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By the end of January, the market-cap value was zero. What caused the steep nosedive? According to James Koutoulas, it was two-fold: the rejection of LGBCoin as a sponsor on Jan. 4th and the offloading of shares by LGBCoin insiders.

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This puts Cawthorn’s involvement on a level of potential criminal – as well as civil – repercussions. Cawthorn presented himself as an “owner” of the cryptocurrency on several occasions. All lawmakers are required to disclose any crypto valued at $1000 or more that they hold and, if Cawthorn profited (which it’s believed he did), he is in violation of the Stock Trading or Congressional Knowledge Act of Congress Act.

Although Koutoulas has defended Cawthorn, saying that “it is not technically or legally possible for a decentralized meme coin that exists to promote free speech and charitable giving to be classified or treated as a security,” the STOCK Act explicitly states that “any non-public information derived from the individual’s position…or gained from performance of the individual’s duties, for personal benefit” would be a violation.

Someone not buying that excuse is Senator Thom Tillis (R-NC). He tweeted this on Tuesday:

If that isn’t enough, Cawthorn introduced H.Res.937 in February to “deregulate cryptocurrencies and incentivize blockchain innovation,” presenting a conflict of interest as the freshman congressman continues to promote LGBCoin by appearing at Freedom Fight Night in Florida with Koutoulas and being used in ads for the crypto currency’s promotion.

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The Let’s Go Brandon Coin was relaunched in February, two weeks before Cawthorn proposed legislation. It opened on Feb. 9th to a high of 0.0000008263, while at press time Coin Market Cap has it listed at 0.00000000113 – a 95% drop.

Cawthorn has been involved in lots of controversies lately. Recently having his driver’s license confiscated, and attempting to bring a firearm on a plane…again. The kind of legal representation Cawthorn’s going to need doesn’t come cheap. If Cawthorn was an investor in LGBCoin as is suspected, it sounds like he’s going to need any profits he may have generated…and then some.

Follow Ty Ross on Twitter @cooltxchick

RELATED STORY: REBUKE: Top House GOP leaders confront Cawthorn over his drug-fueled orgy allegations

Ty Ross

News journalist for Washington Press and Occupy Democrats.

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