Fellow North Carolina Republican calls for insider trading probe of Rep. Madison Cawthorn’s crypto holdings

Cawthorn’s official Instagram account commented on that photo: “Tomorrow we go to the moon!”

One day later, on Dec. 30, the racing team for NASCAR driver Brandon Brown announced that Let’s Go Brandon coin had been signed as the team’s primary partner for the 2022 season. Koutoulas is quoted in the press release.

Let’s Go Brandon coin’s value shot up more than 75% after the announcement, bringing the total value of all the coins in circulation to more than $570 million, according to news reports. Days later, NASCAR rejected the sponsorship deal, and by February the coin’s price had plummeted.

The timeline of events suggests to some watchdog groups that Cawthorn may have had nonpublic knowledge of the deal with Brown at the time of the Dec. 29 Instagram post.

“It certainly raises some eyebrows,” said Jordan Libowitz, spokesman for Citizens for Responsibility and Ethics in Washington, in a phone interview with CNBC.

He said it doesn’t look good for Cawthorn, adding that the congressman’s actions could pose ethical problems even if they do not violate the law.

“We tend to hope that our representatives in the government act on a higher level, that even the appearance of financial impropriety can sometimes be as bad as the impropriety itself,” he said. “At the very least, Cawthorn has an optics issue, and at the worst there’s a potential legal issue.”

Koutoulas in a tweet Tuesday night accused Public Citizen of “libelous scumbaggery directed at” Cawthorn after a lobbyist for the group told the Examiner that Cawthorn may have violated insider trading rules.

Koutoulas, in a statement to CNBC, called the Examiner’s report “absurd.”

“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,” he said.

An expert from the Project on Government Oversight, however, told the Examiner that even if the cryptocurrency is not classified as a security, insider trading rules could still apply.

In April, an investor in the coin filed a class-action lawsuit accusing the people behind the token of orchestrating a pump-and-dump scheme. The lawsuit does not name Cawthorn as a defendant but includes multiple instances of him promoting the coin. The legal complaint also alleges that after a similar version of the coin was relaunched in February, Cawthorn and others have continued to promote it.

Koutoulas’ statement said the lawsuit’s pump-and-dump allegations are “ludicrous,” and slammed the plaintiff as a “crazed stalker.”

Cawthorn recently has been in hot water for driving without a valid license and for claiming that other members of Congress were using drugs and inviting him to orgies. House Minority Leader Kevin McCarthy, R-Calif., has said there was no evidence for Cawthorn’s claims.

Article source: https://www.cnbc.com/2022/04/27/crypto-probe-thom-tillis-urges-probe-of-madison-cawthorn-over-possible-insider-trading.html