The Securities and Exchange Commission (SEC) has leveled serious charges against Nader Al-Naji, the founder of BitClout. The SEC alleges that Al-Naji orchestrated a multi-million dollar fraudulent scheme involving the social media platform BitClout and its native token, BTCLT. According to the complaint, Al-Naji raised over $257 million through unregistered sales of BTCLT, misleading investors by claiming proceeds would not benefit him or other BitClout employees.
The SEC’s investigation revealed that Al-Naji spent a significant portion of the raised funds on personal luxuries and gifts for family members, amounting to approximately $7 million. The agency also named Al-Naji’s wife, mother, and related entities as relief defendants, seeking to recover the misappropriated investor funds.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Al-Naji, accusing him of wire fraud. This charge carries a potential prison sentence of up to 20 years. The SEC’s complaint further accuses Al-Naji of misrepresenting BitClout as a decentralized platform with no controlling entity while secretly operating it under the pseudonym “Diamondhands.”
The charges against Al-Naji and the allegations of fraudulent activities have sent shockwaves through the cryptocurrency community, highlighting the risks associated with investing in unregulated digital assets. The SEC’s actions underscore its ongoing efforts to protect investors and hold accountable those who engage in fraudulent practices within the crypto industry.
