GOP Rep. Madison Cawthorn has become a controversial figure on Capitol Hill.
A Washington Examiner story revealed he could be violating insider trading laws.
He said he purchased a cryptocurrency called “Let’s Go Brandon,” but if so he didn’t report it as required.
Republican Rep. Madison Cawthorn of North Carolina appears to have violated a federal conflict-of-interest law by failing to report his stake in a cryptocurrency named for the anti-Joe Biden slogan “Let’s Go Brandon.”
By law, members of Congress must quickly and publicly report their crypto purchases in certified congressional documents, known as periodic transaction reports.
The LGBCoin purchase appears to have happened in late December 2021, according to Cawthorn’s Instagram. It’s possible that Cawthorn lied about purchasing the coin, or that he told the truth but failed to file the required documents.
If he did make the purchase, House rules on cryptocurrency disclosure are explicit.
“All financial disclosure filings must, disclosure ownership interests of virtual currency” is worth more than $1,000, as well as “purchases or exchanges of cryptocurrencies,” the Committee on House Ethics wrote in a 2018 memorandum to lawmakers and congressional staffers in 2018.
Cawthorn’s office did not reply to Insider’s questions about what had happened.
Cawthorn would have had no more than 30 days to make the disclosure, given that he clearly had direct knowledge of the purchase.
Under congressional rules he could face a minimum fine of $200 unless the House Committee on Ethics grants him a waiver that would absolve him of the fine.
News about the LGBCoin purchase was originally published in the Washington Examiner, which reported that Cawthorn may be in violation of insider trading laws. If true, such a crime would be a matter for the Justice Department and the Securities and Exchange Commission to investigate.
The Committee on House Ethics could also involve itself — and should, said one Republican senator.
“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,” Sen. Thom Tillis, a Republican from North Carolina who has endorsed one of Cawthorn’s primary challengers, said Wednesday.
On December 30, the value of all LGBCoin in circulation eclipsed $570 million. By the end of January, however, its market cap dropped to $0.
Cawthorn violating the STOCK Act would put him among 59 other members of Congress who have violated the 2012 Stop Trading on Congressional Knowledge Act.
The law clarified that it was illegal for members of Congress to engage in insider trading and created disclosure requirements that allow the public to see whether their representatives can personally benefit in the votes they cast or the legislation they introduce.
If lawmakers don’t disclose details of their finances, or do so in a timely way, then the public is left in the dark about potential conflicts of interest.
Cawthorn’s non-disclosure of his stated LGBCoin purchase “raises serious questions of whether Cawthorn violated the law,” said Kedric Payne of the nonpartisan Campaign Legal Center, who previously served as deputy chief counsel of the Office of Congressional Ethics. “The lawmaker should explain the discrepancy because the public has a right to know that their elected officials are not violating the law.”
Based on what’s already in the public domain, “there is at least a strong case to be made that Rep. Cawthorn violated the STOCK Act’s reporting requirements as well as potentially engaging in insider trading,” said Dylan Hedtler-Gaudette, government affairs manager for nonpartisan watchdog organization Project on Government Oversight. “I’m reminded of the expression about something that quacks like a duck probably being a duck.”
Numerous Cawthorn controversies
Cawthorn has faced repeated controversy as a lawmaker even as a freshman. On Tuesday, officers cited the congressman for carrying a loaded 9-millimeter handgun inside of Charlotte Douglas International Airport.
He was previously cited, but not charged, in February 2021 for trying to bring a gun onto a plane in his carry-on luggage at Asheville Regional Airport.
Last month, House Minority Leader Kevin McCarthy publicly rebuked Cawthorn after he said on a podcast that he’d seen Washington Republicans use cocaine and that he’d been asked to participate in an orgy.
Cawthorn’s personal finances have also clashed with his stated policy positions. He has been an outspoken critic of “Big Tech,” yet made up to $100,200 in capital gains from investments in Amazon, Apple, and Comcast, Insider previously reported.
In February, Cawthorn introduced a resolution to “deregulate cryptocurrencies and incentivize blockchain innovation.”
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