Bitrabo Editorial
The creator of BitClout, Nader Al-Naji, is facing scrutiny from the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) over allegations of involvement in a fraudulent crypto scheme that resulted in significant investor losses.
Allegations Against BitClout Founder
According to the SEC’s complaint, Al-Naji was accused of raising over $257 million through unregistered offers and sales of the native token, BTCLT, deceiving investors by misrepresenting the use of proceeds and diverting funds for personal expenses.
The complaint also revealed that Al-Naji took great lengths to portray BitClout as a decentralized entity while allegedly engaging in deceptive practices and misrepresenting the true nature of the project to investors.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the seriousness of the situation and the agency’s commitment to holding Al-Naji accountable for misleading investors.
Regulatory Storm Brews
The SEC’s complaint against Al-Naji includes charges of securities registration and anti-fraud violations dating back to the Securities Act of 1933 and the Securities Exchange Act of 1934. Relief defendants, including Al-Naji’s wife, mother, and associated entities, were named for funds allegedly transferred from investor contributions.
Crypto lawyer Preston Byrne highlighted past warnings about Al-Naji’s activities, including his involvement in previous schemes and claims of BitClout’s decentralization, which are now under scrutiny by regulators.
The specific number of years Al-Naji could face if found guilty was not disclosed by the agency, pending further developments in the case.
Featured image from DALL-E, chart from TradingView.com