the money game

Madison Cawthorn’s Crypto Guru Goes Bust

In the hyperworld of Miami’s crypto right, the “Let’s Go Brandon” coin sounded as good as gold.

Photo-Illustration: Intelligencer; Photos: Getty Images
Photo-Illustration: Intelligencer; Photos: Getty Images

Hedge-fund manager James Koutoulas made an important friend last year at Donald Trump’s holiday party inside an airplane hangar in Naples, Florida. Among the guests, who paid $10,000 a head to network around a replica of Melania Trump’s ominous Christmas White House décor, he came across Representative Madison Cawthorn of North Carolina, and the two began discussing cryptocurrencies. Over the previous month or so, Koutoulas had gone in deep on a meme coin called Let’s Go Brandon, which took its name from the cryptic insult of the sitting president. He was even promoting it that night, wearing an LGB button on the black shawl collar of his white dinner jacket.

Cawthorn was intrigued. “He loved the idea of the coin as a crypto savvy youngin who is politically aligned with it,” Koutoulas says over text. The two linked again the next night at an after-party for another conservative holiday bash, and Koutoulas recalls that Cawthorn bought an undisclosed amount of the token, then worth fractions of a fraction of a penny.

On December 29, they ran into each other at a party at GOP kingmaker Peter Thiel’s compound on an artificial island in Biscayne Bay. For some reason, Cawthorn was energized that night by the prospects of the Let’s Go Brandon coin, which references the right’s favorite saying since October, when a reporter tried to clean up a “Fuck Joe Biden” chant at the Talladega Superspeedway by saying that NASCAR fans were really just cheering on driver Brandon Brown.

“LGB legends … Tomorrow we go to the moon!” Cawthorn posted on Instagram under a picture of him with Koutoulas, using the crypto phrase for a commodity whose value is about to rocket up. He was right. Three days earlier, LGB had secured a deal with Brown himself, making the coin his on-track partner for the season; his race-day Camaro would feature an American-flag wrap with the letters LGB on the hood. Upon the announcement on December 30, the price of the coin jumped 75 percent and the volume of trading went through the roof. Somehow, a coin with no inherent value briefly reached a market capitalization of $570 million.

Cawthorn’s comment was forgotten, overshadowed by his assorted scandals this spring. But in late April, the Washington Examiner reported that the timing of the congressman’s promo may have violated federal insider-trading laws if he acted on nonpublic material information when he hyped the coin he owned on Instagram. If Cawthorn bought more than $1,000 in LGB, watchdogs say, he may have violated the STOCK Act. The law, which is routinely stepped on by lawmakers, is designed to stop members of Congress and other government employees from benefiting from nonpublic information.

Cawthorn has described the allegation as “ridiculous,” while Koutoulas offered a timeline that would mean the congressman did not, in fact, have access to nonpublic information when he wrote about the coin. Koutoulas explained that, on December 29, Brown announced on Instagram that there was “BIG news dropping” the next morning. Koutoulas says that LGB coin “almost certainly” reposted the announcement to its Instagram Story the same day, making it “pretty obvious” for anyone paying attention that there would be some sort of collaboration coming in a few hours. (Cawthorn’s message came several hours after Brown’s post). When asked if he could provide a screenshot of that Instagram Story — which disappears to the public after 24 hours — Koutoulas said he no longer has access to the login due to a rebranding of the coin. And while Cawthorn has stated that he purchased LGB coin, Koutoulas says that “Madison commenting on something does not mean he traded on it.” (Cawthorn did not respond to requests for comment.)

Without a House Ethics Committee investigation — called for by Cawthorn’s nemesis in North Carolina, Senator Thom Tillis — it’s difficult to parse out exactly what Cawthorn knew, when he knew it, and just how much of the meme coin he purchased. But whether or not a probe emerges, the rise and fall of the Let’s Go Brandon coin is a perfect encapsulation of the move-fast, break-everything world of Miami’s crypto right.

The idea for the meme coin began last year at a Halloween party at the Soho House outpost in Miami Beach. Mingling with the costumed and the tanned, Koutoulas went for a different look, carrying a blow-up doll with a Joe Biden mask on it in one hand; in the other was a giant poster of Chinese leader Xi Jinping’s head wearing a “Let’s Go Brandon” sign like a necklace. After seeing a picture of Koutoulas in the costume, one of his friends thought it would be funny to make a cryptocurrency riffing on the chant; soon after, another friend gave Koutoulas 1 trillion tokens of the coin, each worth slivers of a percentage point of a penny. Koutoulas, initially the coin’s champion on social media and now its foundation director, declined to name who minted it, citing a confidentiality agreement.

Unlike many dabbling in the get-rich-quick world of knockoff crypto tokens, Koutoulas has a sturdy career. As a young securities lawyer during the fallout from the financial crisis, he led the recovery of $6.7 billion in customer funds from the collapse of the derivatives broker MF Global, which was run by Jon Corzine, the former New Jersey senator and governor. But through this past winter, Koutoulas spent a good chunk of his time promoting the coin during events in the conservative social sphere: a NASCAR race, a visit on a helicopter to Mar-a-Lago, a speaking engagement at a Turning Point USA conference. He became the hype man that LGB needed. Unlike more established cryptocurrencies that are also tanking right now, meme coins are only worth anything if people are paying attention. Thanks to his promotion — and social-media co-signs from MAGA stars like Cawthorn and Candace Owens — things were progressing quickly.

Then NASCAR pulled the rug out. On January 4, league executives informed Brown’s team that they were rejecting the LGB-coin sponsorship; despite Koutoulas’s claim that NASCAR gave its written approval on December 26, the league never formally green-lit the deal. According to the Washington Post, the okay came from a NASCAR employee who was not actually authorized to approve such a relationship. Executives also told Brown’s team months before they would not allow a race car to be emblazoned for an entire season with a minced oath inviting the president to get bent.

It was the beginning of the end for LGB coin. The price fell off dramatically as people bailed on their joke investment made with real money; investors on Twitter who got out too late complained of losing thousands. While Koutoulas wondered if the NASCAR deal fell through because of pressure from the Biden administration, the coin lost millions from its liquidity pool — the cash reserves allowing people to buy and sell meme tokens. Then came the “whales,” the industry name for those holding enough of a coin to manipulate its price upon a big sale. At a dinner with Donald Trump Jr. at Peter Thiel’s on January 26, Koutoulas says he had to excuse himself from the high-rolling table when he saw the LGB coin falling off a cliff due to the remaining major holders cashing out. To stave off a total collapse, he says he bought $70,000 worth of LGB on the spot. It didn’t work. By the end of January, the coin with a brief market cap north of half a billion was worth nothing. A joke emerged about what LGB’s call letters stood for: Let’s Go Bankrupt.

The cave-in didn’t stop Koutoulas for long. In February, he says he “came back to salvage” the coin after threatening to sue a group of investors trying to revive the project; their new structure that would stop whales from bailing all at once. Trading of the revived token, now known as LETSGO, spiked around March 19, when Cawthorn posed with its logo inside the octagon at an MMA fight near the Miami airport. The bigger win that night came 30 miles north outside Fort Lauderdale, when Donald Trump mentioned the coin in his address at the American Freedom Tour. Whoever told him about it didn’t really get the message through. “And a very controversial group — I guess, I don’t know — crypto coin,” said Trump, who was given the equivalent of $45,000 in LETSGO the week before. This loose endorsement caused the trading volume to shoot up, reaching as high as $3.19 million in a 24-hour period before plummeting again.

After that brief surge, April was a cruel month. On April Fool’s Day, an investor filed a class-action lawsuit against Koutoulas and other coin promoters, alleging that their January activity was a pump-and-dump scheme. “The notion that the architects of the coin ran off with money is not only false, the opposite is true,” Koutoulas wrote in a text. “The reversed NASCAR sponsorship cost everyone millions, including me.” By the end of the month, Cawthorn was hit with the insider-trading allegations — adding a crypto controversy to his budding list of scandals, including alleged misconduct, frequent speeding, a video of him naked in bed with his cousin acting “foolish,” and carrying weapons all over the place. The day after the insider-trading allegation, LETSGO was forced to relaunch for the second time in three months.

Koutoulas says this period has been “hectic, to say the least.” But he remains confident that the coin will endure, describing an effort to “revolutionize charitable giving in a secure way that will put an end to scenarios like what happened in Canada,” when GoFundMe rerouted donations to the trucker convoy to charities of the company’s choosing.

But if it all falls apart a third time, he at least found a young friend in a high place. Koutoulas says he and Cawthorn “chat a little every couple days.” Before all the “fake allegations,” they talked about getting Cawthorn SCUBA certified; Koutoulas volunteers with a charity that runs diving trips for vets and people with disabilities. But lately, their talk is of the scandals that could sink Cawthorn in the primary next week if his strategy of blazing right past them doesn’t work. Koutoulas says his friend has a new motto: “Fake news is the price of playing in the big leagues.”

Madison Cawthorn’s Crypto Guru Goes Bust