In the House of Representatives' Ethics Committee announcement of the probe, it said its 10 bipartisan members had voted unanimously to form an investigative subcommittee on May 11.
The ethics panel said the inquiry would seek to determine whether Cawthorn may have "improperly promoted a cryptocurrency in which he may have had an undisclosed financial interest, and engaged in an improper relationship with an individual employed on his congressional staff."
The committee also cautioned that the decision to open an investigation "does not itself indicate that any violation has occurred."
Blake Harp, Cawthorn's chief of staff, said in a statement: "We welcome the opportunity to prove that Congressman Cawthorn committed no wrongdoing and that he was falsely accused by partisan adversaries for political gain."
Cawthorn, at 26 the youngest member of Congress, lost his bid for re-election to state Senator Chuck Edwards in North Carolina's Republican primary, after a string of self-inflicted controversies turned major figures in the party against him.
The Washington Examiner reported in April that watchdog groups believed Cawthorn may have violated federal insider trading laws by promoting a cryptocurrency coin mocking President Joe Biden.
Cawthorn's re-election campaign had been riddled with embarrassing episodes including a nude video, his own claim that he was invited to a cocaine-fueled Washington orgy by leaders he respected, two attempts to carry a gun onto an airplane and his description of Ukrainian President Volodymyr Zelenskiy as a "thug."
Cawthorn was once seen as a rising star of the Republican Party and had been a staunch ally of former President Donald Trump, who had endorsed his re-election bid.
(Reporting by David Morgan and Makini Brice in WashingtonEditing by Matthew Lewis)
