The US Securities and Exchange Commission (SEC) has dropped its civil fraud case against Nader Al-Naji, the founder of BitClout, according to court documents. The SEC had filed a lawsuit against Al-Naji in 2024, alleging he had raised more than $257 million (approximately Rs. 2,374 crore) by selling BitClout’s native token while allegedly deceiving investors about the intended use of the proceeds. The case was dismissed with prejudice, meaning the SEC cannot bring the same charges again. The development follows the Department of Justice’s earlier decision to drop a parallel criminal case against the crypto entrepreneur.
Court Filing Ends SEC Civil Enforcement Case Linked to BitClout Token Sale
This SEC decision was formalised in a joint clause filed with the US District Court for the Southern District of New York. The initial allegation in the case was that the founder of BitClout sold the BTCLT token in an unregistered securities offering, raising over $257 million (roughly Rs. 2,374 crore) from investors. Regulators also claimed that more than $7 million (roughly Rs. 64.7 crore) of those funds were spent on personal expenses, including luxury housing and gifts to family members.
In its litigation release, the SEC said the decision to seek dismissal was based on “the particular facts and circumstances of this case” and does not necessarily reflect the agency’s position on other enforcement actions involving crypto projects. The dismissal means Al-Naji will not face penalties or admit wrongdoing in the case. The regulator made it clear that this particular outcome shouldn’t be seen as a signal of a wider shift in how it enforces rules for digital asset companies.
This news arrives alongside a series of changes in how US regulators are approaching enforcement actions related to crypto. Earlier this year, the SEC also decided to drop or reconsider several cases involving digital asset firms, including its lawsuit against the crypto exchange Coinbase. The company stated that the regulator had, in principle, agreed to dismiss the case, representing a significant legal clash between US regulators and the crypto industry.
BitClout debuted in 2021 as a blockchain-based social media platform, allowing users to trade tokens associated with online personalities. The project later evolved into the DeSo blockchain network but faced criticism over concerns about decentralisation and its use of scraped social media data.
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