On Tuesday, the Washington Examiner reported that experts suspect Rep. Madison Cawthorn, R-N.C., may have violated insider trading laws when he promoted a cryptocurrency named after a vulgar chant against President Joe Biden.
"On Dec. 29, the beleaguered North Carolina congressman posed at a party with James Koutoulas, a hedge fund manager and the ringleader of the Let's Go Brandon cryptocurrency, a meme coin set up in the wake of the chant mocking President Joe Biden," reported Andrew Kerr. "'LGB legends. ... Tomorrow we go to the moon!' Cawthorn, who has stated publicly he owns the cryptocurrency, posted on Instagram in response to the picture posted on Koutoulas's Instagram page."
Just one day later, Brandon Brown, the NASCAR driver from which the anti-Biden chant originated, said the meme coin would sponsor his 2022 racing season.
"Multiple watchdog groups told the Washington Examiner that Cawthorn's Dec. 29 Instagram post suggests the lawmaker may have had advanced nonpublic knowledge of LGBCoin's deal with Brown," said the report. "The watchdogs said the post, combined with Cawthorn's statement that he owns LGBCoin, warrants an investigation from the Department of Justice and the Securities and Exchange Commission to determine whether the lawmaker violated federal insider trading laws."
Making matters worse, the coin itself is facing a class-action lawsuit alleging it was part of a so-called "pump-and-dump" scheme, where people create false hype to manipulate the value of the asset, then cash out before the price falls again.
"Immediately following Brown's Dec. 30 announcement, the value of all LGBCoin in circulation eclipsed $570 million. By the end of January, the market cap of the meme coin dropped to $0," said the report. "Koutoulas said in a Feb. 20 livestream that two factors led to LGBCoin's precipitous decline: First, NASCAR rejected LGBCoin's sponsorship deal with Brown on Jan. 4, and then later that month, unidentified insiders that owned an outsize share of the coin dumped all their holdings at once, causing the coin's market value to evaporate The swift rise and fall of the meme coin led one jilted investor to file a class-action lawsuit in April accusing Koutoulas and other LGBCoin insiders of using the digital currency to orchestrate a pump-and-dump scheme."
In addition to all of this, Cawthorn was also caught for the second time trying to carry a handgun through airport security, and was charged for driving with a suspended license earlier this month. He also became an internet meme after images leaked of him partying in women's lingerie.
This all comes as House Republicans and North Carolina GOP officials are reportedly tired of his erratic behavior, with the latter moving to back his primary challenger.