BitClout Founder Nader Al-Naji Charged in $257 Million Fraud Scheme
The U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have charged Nader Al-Naji, the founder of BitClout, with orchestrating a multi-million-dollar fraudulent crypto asset scheme. The charges involve unregistered offers and sales of the platform’s native token, BTCLT, and misleading investors about the nature of the project.
According to the SEC’s complaint, Al-Naji raised over $257 million in November 2020 through unregistered sales of BTCLT. He allegedly portrayed BitClout as a decentralized project under the pseudonym “Diamondhands,” creating the false impression that the platform operated autonomously without a controlling entity. This portrayal was intended to evade regulatory scrutiny and suggest that no company was behind the project.
Despite claiming that the raised funds would not be used for personal gain, Al-Naji is accused of spending over $7 million on personal expenses, including renting a mansion in Beverly Hills and providing lavish cash gifts to family members. The complaint also alleges that Al-Naji misled investors by securing a letter from a prominent law firm, which, based on his mischaracterizations, suggested that BTCLT was not likely to be considered a security under federal law. He reportedly informed some investors that this misrepresentation was a deliberate effort to avoid legal compliance.
The charges against Al-Naji highlight the ongoing scrutiny of the cryptocurrency industry by U.S. regulatory bodies, emphasizing the need for transparency and legal compliance in digital asset offerings.
Source : cryptopotato
