U.S. Congressman fined for marketing crypto project

Crypto Regulation
U.S. Congressman fined for marketing crypto project

A report published on Dec. 6 states that Representative Madison Cawthorn violated congressional ethics standards by unlawfully promoting crypto which he held a financial stake. Congressman from Western North Carolina “improperly marketed a crypto in which he held a financial stake in defiance of conflict of interest regulations,” according to a seven-month probe by the House Ethics Committee.

Investigative Subcommittee releases report

According to the 81-page report, the “Investigative Subcommittee” determined that the Henderson County Republican had breached the Ethics in Government Act by omitting to disclose his financial commitment in “Let’s Go Brandon” Coin promptly following House disclosure requirements; however, they did not determine that this violation had been “knowing or willful.”

The committee concluded that he was improperly favored by the provision of a gift “when he bought LGB Coin on circumstances more beneficial than those offered to the public at large.” The committee levied a punishment of almost $15,000 against Cawthorn, ordering $14,237.49 to be donated and $1,000 in late reporting fees paid to the Treasury Department.

The report showed that the claims that Cawthorn had an inappropriate relationship with a staff member were not true. Some had speculated that even more significant infractions could have occurred had insider information been used to purchase the coin or manipulate the market. It was unclear whether or not the SEC and the Justice Department were conducting a criminal probe.

Cawthorn paid to promote LGB Coin

On Dec. 21, 2021, Cawthorn was paid $150,000 with 180 billion LGB Coin. According to the subcommittee’s findings, the deal closed before LGB Coin revealed it would sponsor Racing driver Brandon Brown for the 2022 season. 

After the sponsorship announcement on Dec. 30, 2021, NASCAR revoked its blessing on Jan. 4. “Furthermore, Representative Cawthorn was also seen in many images and videos where he appeared to endorse or actively encourage folks to purchase LGB Coin, particularly after the worth of the LGB Coin that he owned dropped.”

The new “LETSGO” coin was distributed to LGB Coin holders’ cryptocurrency wallets at the relaunch in February 2022. The report stated that neither the older LGB Coin nor the renamed LETSGO coin had a considerable value recovery.

In April 2022, a class action lawsuit was filed in a federal district court accusing the defendants and NASCAR of running a “pump and dump” scam. Although not named in the ongoing lawsuit, Cawthorn allegedly “used Cawthorn to market the LGBCoin at an event and investors watching the event on social media,” according to the plaintiffs.

Due to several controversies and embarrassing gaffes over the years, Cawthorn has decided to depart Congress after only one term. Senator Chuck Edwards, whom he lost to in the May primary, defeated Jasmine Beach-Ferrara, a Democrat, in the national election.

Follow Us on Google News
Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.