The U.S. Securities and Exchange Commission (SEC), along with the U.S. Attorney’s Office for the Southern District of New York, has charged BitClout founder Nader Al-Naji with fraud. The SEC alleges that Al-Naji sold $257 million in unregistered securities through BitClout’s native token, BTCLT, and misused investor funds. The complaint also involves Decentralized Social (DeSo), a project launched by Al-Naji.
According to the SEC, Al-Naji allegedly spent $7 million of customer funds on personal luxuries, including a Beverly Hills mansion and cash gifts to family members. This was despite assurances to investors that the funds would not be used for compensating BitClout team members. Furthermore, the SEC claims that Al-Naji misrepresented BitClout’s decentralization, falsely stating that no single entity controlled the project, while allegedly managing it behind the scenes.
SEC’s Director of Enforcement, Gurbir S. Grewal, commented on the charges, stating that Al-Naji sought to evade federal securities laws by presenting the project as decentralized. The complaint also names Al-Naji’s wife, mother, and related business entities as relief defendants, accusing them of receiving investor funds.
In response, Jordan and Luke Lintz, founders of HighKey Agency and investors in Decentralized Social, clarified that the SEC’s allegations were solely related to BitClout, asserting that the DeSo treasury remains untouched. They declined to comment on Al-Naji’s alleged personal expenditures.
The case highlights ongoing concerns over transparency and regulatory compliance in the cryptocurrency sector, as authorities continue to scrutinize the practices of high-profile figures in the industry.
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