Republican Rep. Madison Cawthorn of North Carolina violated a federal conflict-of-interest law by failing to properly report his stake in a cryptocurrency named for the anti-Joe Biden slogan "Let's Go Brandon."
The young congressman, who lost his seat last week to a primary challenger, purchased up to $250,000 of LGB coin on December 21, 2021, according to financial disclosures made public on Friday. On December 31, he sold some of his stake in the coin — at least $100,001-worth — but still held on to some of it.
Cawthorn's disclosure also shows that he bought up to $265,000 in Ethereum, one of the most highly traded cryptocurrencies, in two separate purchases at the end of December 2021.
While it's not illegal for Cawthorn to buy or sell the cryptocurrencies, he reported each of the transactions nearly six months after making them — well over the 30-day limit required under the 2012 Stop Trading on Congressional Knowledge Act, or STOCK Act.
The late disclosure means Cawthorn joins 60 other members of Congress who have violated the STOCK Act by failing to follow the transparency provisions in the law.
"All financial disclosure filings must disclose ownership interests of virtual currency" worth more than $1,000, as well as "purchases, sales or exchanges of cryptocurrencies," the House Committee on Ethics wrote in a 2018 memorandum to lawmakers and congressional staffers.
Under congressional rules, Cawthorn could face a minimum fine of $200, but the House Committee on Ethics could grant him a waiver that would absolve him of the fine.
Cawthorn's office did not immediately respond to questions about whether he knew about the rules or whether he'd paid a late fee.
News about the crypto 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.
On December 30, the value of all Let's Go Brandon coins in circulation eclipsed $570 million. By the end of January, its market cap dropped to $0.
The 2012 STOCK Act 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 fail to do so in a timely way, the public is left in the dark about potential conflicts of interest.
Cawthorn has faced numerous controversies during his short time in office that drew the ire of GOP leadership. In April, officers cited him for carrying a loaded 9-millimeter handgun inside 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 policy positions. He has been an outspoken critic of "Big Tech" but made up to $100,200 in capital gains from investments in Amazon, Apple, and Comcast, Insider previously reported.
