Disclosing assets and managing finances is a complicated matter in the United States. The country’s lawmakers are required to report their investments within 45 days, according to the Federal STOCK Act. A failure in abiding by the rule asks for action against the individual. However, it was recently found out that GOP Representative, Madison Cawthorn was found guilty of hiding his investment in a controversial meme coin.
Previously, the House Ethics Committee started investigating Madison Cawthorn for his role and contribution to a pump and dump crypto project. The project was called Let’s Go Brandon (LGB). Nonetheless, the allegation was that Madison Cawthorn had not disclosed his investment in the coin within the prescribed criteria. His recent financial statements have also approved the allegation.
Madison Cawthorn violates the Federal STOCK Actawthorn fails to disclose LGB purchase
Madiso Cawthorn was the first US Congressman who was born in the 1990s. The young Republican Representative gained the spotlight in politics. However, he is currently surrounded by controversies. Most recently, he lost his bid in the primary elections of the Republican Party. Additionally, he now faces criticism for violating the 2012 Stop Trading on Congressional Knowledge Act, more commonly known as the STOCK Act.
It is reported that he had stakes in the LGB meme coin. The 26-years old is said to have invested around $250,000 in LGB on December 21. In addition to this, he bought $265,000 worth of Ethereum on December 27 and December 31.
Lawmakers are allowed to make investments or trades in cryptocurrencies. But they are bound to disclose them within the next 45 days. On the other hand, Cawthorn took around five months extra to reveal these investments. It raises concerns over his involvement in the meme coin.
As digital currencies are gaining more and more popularity among consumers, the House Committee on Ethics guided Representatives and Staffers in 2018 for their financial disclosure responsibilities. They were supposed to reveal any purchase, sale, or exchange of cryptocurrencies that were valued at over a thousand dollars.
Was Cawthorn involved in a pump and dump cryptocurrency?
Let’s Go Brandon was issued as an anti-Joe Biden cryptocurrency. The meme coin received attention from consumers, gaining a market cap of over $570 million last year. However, the bubble soon burst for LGB, as the coin plunged to zero in the following days. Nonetheless, the developers launched the project again after this collapse. It was of no use, as LFB fell to zero again.
In December last year, the LFB project was hyperactive. It received support from the NASCAR driver Brandon Brown. He stated that the network will be the official sponsor for his 2022 season. It provided a breakthrough for the coin, as it rose in value. It received support from consumers.
But it was reported that the deal went off in January. This caused a significant sell-off from the investors of the coins. People started dumping the coin, and investors suffered huge losses. Investors and stakeholders were at the receiving end after the crash of LFB.
However, a few days before this incident, Madison Cawthorn posted in favor of the token on his Instagram account. He wrote, “Going to the moon” for the coin. Therefore, regulators believed that Madison Cawthorn had some sort of interest in the meme coin. They thought that the Congressman had signed a deal for personal benefit without bringing it to notice. Thus, speculations led to investigations, and Madison Cawthorn was found to be in violation.
On May 23, the House Ethics Committee started investigations over the promotion of LFB by Madison Crawthorn and his possible financial interests in the meme coin. Nonetheless, it is now reported that the Republican might face a minimum fine of $200. Along with this, he will get a waiver from the House Committee on Ethics. He was among the 60 lawmakers who did not disclose stock involvement of their own, their spouse, or their dependent children.
