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House probes Cawthorn crypto scheme

Rep. Madison Cawthorn, R-N.C., talks with reporters and supporters as results from the North Carolina primary election continue to report in at his campaign headquarters on Tuesday, May 17, 2022 in Hendersonville, NC. Jabin Botsford/The Washington Post via Getty Images

The House Ethics Committee on Monday opened a far-reaching federal probe into Rep. Madison Cawthorn, R-N.C., over allegations that he committed insider trading and had a sexual relationship with his aide. 

The probe, which will be led by a subcommittee established on May 11, comes just days after the freshman firebrand lost his re-election bid amid a torrent of reports around his sexual proclivities. 

Earlier this month, The Daily Mail published a leaked video showing Cawthorn's second cousin, Stephen Smith, who is also his scheduler, reach for the lawmaker's crotch while the two spoke about suggestive topics in the car. Weeks later, the congressman was shown in a separate video, leaked by an anti-Cawthorn conservative PAC, nude in bed with another man. 

RELATED: Conservative group that helped take down Madison Cawthorn has a new target: Lauren Boebert

Cawthorn has alleged that both videos are part of a political "hit" job. 

"Years ago, in this video, I was being crass with a friend, trying to be funny," he said. "We were acting foolish, and joking. That's it."

According to an ABC affiliate, Cawthorn has paid Smith $141,000 in taxpayer and campaign dollars since 2020. 

House filings show that Smith took in $32,744 between January 4, 2021, and August 22, 2021. Between August 1 and December 31 of that year, Smith received another $28,487 as an Americans with Disabilities Act aide. The scheduler has also reportedly collected more than $80,000 from Cawthorn's campaign since January 2020. 

Apart from his relationship with Smith, House members are also scrutinizing a series of cryptocurrency transactions the North Carolina legislator made spanning into last year.

RELATED: Madison Cawthorn's scandalous freshman term: 12 controversial moments since joining Congress

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According to The Washington Examiner, Cawthorn may have taken part in an alleged pump-and-dump scheme to boost the value of "Let's Go Brandon" cryptocurrency, a crypto meme coin named after a minced oath that actually means "F*ck Joe Biden."

Back in December, the lawmaker reportedly took to social media to promote the currency, which he has said he owned, just a day before NASCAR driver Brandon Brown announced that he would be the coin's chief sponsor. Following Brown's announcement, the coin immediately shot up by 75% in value. But just a month later, the coin's value plummeted to $0 after a number of unknown insiders issued mass selloffs, spurring an April lawsuit that accused hedge fund manager James Koutoulas, who founded the coin, of a pump-and-dump scheme.

Multiple ethics watchdogs have come forward to express concerns that Cawthorn may have taken advantage of nonpublic knowledge to line his own pockets.

Dylan Hedtler-Gaudette, the government affairs manager for Project on Government Oversight, told the Examiner that Cawthorn's involvement with the currency "looks really, really bad."

"This does look like a classic case of you got some insider information and acting on that information," he said. "And that's illegal."