U.S. Rep. Madison Cawthorn Accused of LGBCoin Pump-and-Dump Scheme

U.S. representative Madison Cawthorn may have defied federal insider trading laws after his alleged involvement in a crypto pump-and-dump scheme. Several watchdog groups allege that the North Carolina Congressman spread exaggerated statements to boost the price of Let’s Go Brandon (LGBCoin).

LGBCoin is a memecoin created out of the conservative phrase, “F**k you Joe Biden.” Like most memecoins, the token had no value beyond speculation, and was only created to make fun of the sitting U.S. President.

During a party on December 29, 2021, Cawthorn took a picture with James Koutoulas, the mastermind behind the scheme. Koutoulas posted the picture on the same day on his Instagram page and Cawthorn, who revealed he already owns the memecoin, responded to the post, saying:

“LGB legends. … Tomorrow we go to the moon!”

On December 30 (the next day), the price of LGBCoin skyrocketed as Cawthorn predicted. The same day, the memecoin price surged by 75%, reaching a market cap of $570 million after Brandon Brown, a NASCAR driver, announced via Instagram that he will be entering a sponsorship deal with the project.

Koutoulas, who was seen hanging out with Cawthorn a few hours before the announcement, commented on the post.

LGBCoin Crashes Despite Popular Backing

By the end of January 2022, the price of LGBCoin crashed drastically at a market cap of $0 after Brown opted out of the pending sponsorship deal and insiders who own substantial amounts of the memecoin dumped their holdings immediately.

(Source: CoinMarketCap)

The watchdog group noted that the politician may have had primary knowledge of Brown’s pending sponsorship deal with the project.

Cawthorn’s December 29 Instagram post in addition to his declaration of owning the memecoin may have violated the federal insider trading laws. Such actions need to be investigated by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), according to regulatory observers. Meanwhile, the North Carolina representative could face indictments and regulatory fines if found guilty

Earlier this month, one of the victims filed a class action lawsuit against Koutoulas and other LGBCoin insiders for carrying out a pump-and-dump scheme. However, Cawthorn has not been named as a defendant in the case.