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The United States Securities and Exchange Commission (SEC) and the US Attorney’s Office for the Southern District of New York have charged Nader Al-Naji, the founder of BitClout, with selling unregistered securities and defrauding investors. 
According to the <a href="https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-91.pdf" target="_blank" data-type="link" data-id="https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-91.pdf" rel="noreferrer noopener nofollow">SEC’s complaint</a>, Al-Naji raised $257 million by selling BitClout’s native token, BTCLT, without proper registration. The complaint states that Al-Naji used $7 million of these funds for personal luxuries, including leasing a Beverly Hills mansion and giving cash gifts to family members, despite promising investors that their money would not be used for personal compensation. 
The SEC also claims that Al-Naji misled investors about the nature of the BitClout project. While he promoted BitClout as a decentralized platform with no single entity in control, the SEC alleges that Al-Naji was actually managing the project behind the scenes. According to the SEC, this was an attempt to avoid regulatory scrutiny and make the project seem more legitimate to investors. 
The charges also extend to Decentralized Social (DeSo), another project connected to Al-Naji. The complaint includes messages suggesting Al-Naji tried to avoid regulation by falsely presenting DeSo as decentralized.&nbsp; 
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said, “Al-Naji attempted to evade the federal securities laws and defraud the investing public, mistakenly believing that pretending to be decentralized would confuse regulators.” 
Al-Naji’s wife, mother, and related business entities are also named in the complaint, accused of receiving investor funds. SEC believes they benefited from the alleged fraudulent activities. 
In response to these allegations, some investors involved in the DeSo project, such as Jordan and Luke Lintz, founders of HighKey Agency, have said that the SEC’s claims are only about BitClout and that the DeSo treasury remains untouched. They added that they were unaware of Al-Naji’s personal financial dealings mentioned in the complaint. 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 Also Read: <a href="https://www.cryptotimes.io/2024/07/30/sec-removes-solana-as-security-in-amended-binance-lawsuit/" target="_blank" data-type="link" data-id="https://www.cryptotimes.io/2024/07/30/sec-removes-solana-as-security-in-amended-binance-lawsuit/" rel="noreferrer noopener">SEC Removes Solana as Security in Amended Binance Lawsuit</a> 
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SEC Charges BitClout Founder with Fraud and Misuse of Funds

The Crypto Times

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