Madison Cawthorn, a Republican congressman from North Carolina, has been accused of his involvement in a pump and dump crypto scheme dubbed Lets Go Brandon (LETSGO).
According to a recent report by the Washington Examiner, several regulatory watchdogs have implicated Cawthorn in an alleged insider trading scheme involving the relatively short-lived crypto project.
Let’s Go Brandon is a memecoin named after the chant mocking President Joe Biden. Hedge fund manager James Koutoulas pioneered the project.
On December 29, 2021, Cawthorn posted on Instagram, “LGB legends. … Tomorrow we go to the moon!” He also admitted that he has a portion of the cryptocurrency in his portfolio.
Interestingly, on December 30, NASCAR driver Brandon Brown revealed that the crypto project will be the primary sponsor of his 2022 season. The news created a massive buzz, and as a result, the LETSGO token soared 75% and even attained a market cap of $570 million.
In a sudden turn of events, NASCAR rejected the project’s sponsorship deal with Brown in January 2022. Unidentified insiders who had purchased a substantial amount of the coins in circulation quickly dumped all of them.
This caused the memecoin to plummet to zero, and investors were left scratching their heads in losses. One disgruntled investor recently filed a class-action lawsuit accusing Koutoulas and other Let’s Go Brandon insiders of using the token to stage a pump-and-dump scheme.
While Cawthorn was not directly named as a defendant in the lawsuit, he was identified as one of the project’s endorsers and had helped inflate its price just before the rug was pulled.
The watchdogs cited in the report pointed out that Cawthorn probably had advanced non-public knowledge of LETSGO’s deal with Brown, hence his post and statements. They suggested that Cawthorn be investigated by the US Department of Justice and the Securities and Exchange Commission (SEC) to deduce whether he violated federal insider trading laws.
Speaking on the case, Dylan Hedtler-Gaudette, the government affairs manager for one of the federal watchdogs, said:
“This looks really, really bad. This does look like a classic case of you got some insider information and acting on that information. And that’s illegal.”
After its catastrophic failure in January, the project was relaunched a month later, with Koutoulas claiming that it now has safeguards to prevent whales from selling their stash at once.
The project, however, has failed to take off and is trading around 95% below its peak during the first launch. Cawthorn, on the other hand, continues to promote the Let’s Go Brandon token in campaigns.
Featured Image Courtesy of The Times of Israel