In a complaint dated July 30, 2024, the United States #securitiesandExchangeCommission alleged that Nader Al-Naji (“Al-Naji”) violated the Securities Act and Exchange Act in connection with his creation and operation of the BitClout #blockchain protocol, which is now known as the “DeSo” blockchain protocol. Nader Al-Naji allegedly misled investors and misdirected over $257 million to himself through a treasury #wallet🔥 controlled by him. The SEC also alleged that Buse Desticioğlu Al-Naji, Joumana Bahouth Al-Naji, Intangible Holdings, LLC, Firestorm Media, LLC, Viridian City, LLC, and DeSo Foundation (collectively, “Relief Defendants”) received ill-gotten gains in connection with Nader Al-Naji's activities. 
Background 
Concerning the chain of events, the SEC provided the following background: 
Nader Al-Naji, age 32, is a U.S. citizen who resides in Los Angeles, California.  He personally conceived of and created the BitClout blockchain protocol, which is now known as the “DeSo” blockchain protocol.  Al-Naji also developed and created the BitClout platform and BTCLT.  He solicited investors to purchase BTCLT to fund the development of the BitClout platform. He further made public misrepresentations about the use of, and misappropriated, investors proceeds raised from the sale of BTCLT.  
The SEC added: 
In 2019, Al-Naji began designing BitClout, a web and application-based social media platform with an interface that promised to be a “new type of social network that mixes speculation and social media.”  A key selling point for BitClout was that like X, formerly known as Twitter, BitClout users could post content and “like” or share their own or other users’ content.  Al-Naji also claimed that BitClout would be “decentralized” and its content would be stored and indexed on a blockchain, instead of being controlled by a single corporate entity or person. As such, the platform would purportedly be resistant to censorship.  
The SEC continued: 
BitClout’s “White Paper” (marketing materials that described the BitClout project) touted BitClout as “like Bitcoin” because it was “a fully open-source project” with “no company behind it – it’s just coins and code.”  The White Paper further explained that BTCLT would be the native token of the BitClout project. 
The SEC explained further: 
According to documents prepared by Al-Naji in conjunction with the BitClout project, the price of BTCLT would automatically double for every million BTCLT sold directly from the BitClout platform, with Al-Naji reserving two million BTCLT for himself as the project’s founder. Al-Naji explained that purchasing BTCLT through the BitClout platform involved a “totally decentralized” so-called “atomic swap” whereby investors would deposit the crypto asset bitcoin into BitClout’s treasury wallet and receive BTCLT in exchange.  This exchange, however, only operated in one direction, meaning that BTCLT investors could not exchange their tokens back into bitcoin or fiat currency (e.g., U.S. dollars) via the BitClout platform. This fact was not explained in the BitClout White Paper.  The BitClout platform was further billed as allowing investors to speculate by creating an opportunity for them to monetize their social media profile and to invest in the profiles of others through “Creator Coins.” Creator Coins were described in the White Paper as a “new type of asset class” whose value “is tied to the reputation of an individual” or their “standing in society.” 
The SEC concluded: 
In reality, as Al-Naji knew or recklessly disregarded, he controlled the issuance of BTCLT from the BitClout platform, including controlling which investors could obtain the crypto asset security and at what price it was sold.  He also controlled the “treasury wallet” on the blockchain that held the proceeds from the sales of BTCLT and used these proceeds as he desired and for his own personal benefit...  To facilitate the sales of BTCLT to investors, Al-Naji incorporated an entity, Relief Defendant Intangible Holdings, LLC (“IHL”). IHL entered into sales contracts for BTCLT with investors, received funds from them, and custodied BTCLT for and/or transferred BTCLT to those investors. IHL ultimately transferred the proceeds from these sales to BitClout’s treasury wallet controlled by Al-Naji.  In total, the BitClout treasury wallet amassed more than $257 million in bitcoin from investors from the beginning of Al-Naji’s unregistered offers and sales of BTCLT during the period of November 2020 to the present. 
Charges Filed
In the circumstances, the SEC requested the following from the court: 
(a) finding that Al-Naji violated the antifraud and registration provisions of the federal securities laws as alleged herein;  (b) permanently enjoining Al-Naji from violating Securities Act Sections 5(a), 5(c), and 17(a), 15 U.S.C. §§ 77e(a), 77e(c), 77q(a); and Exchange Act Section 10(b), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5;  (c) imposing an injunction pursuant to Exchange Act Section 21(d)(5), 15 U.S.C. § 78u(d)(5), permanently enjoining Al-Naji from participating, directly or indirectly, including, but not limited to, through any entity controlled by him, in any offer or sale of securities, including any crypto asset security; provided, however, that such injunction shall not prevent Al-Naji from purchasing or selling securities, including any crypto asset security, for his own personal account; (d) ordering Al-Naji and Relief Defendants Buse Desticioğlu Al-Naji, Joumana Bahouth Al-Naji, IHL, Firestorm Media, LLC, Viridian City, LLC, and DeSo Foundation to disgorge all ill-gotten gains, plus prejudgment interest thereon, wrongfully obtained as a result of Al-Naji’s illegal conduct, pursuant to Exchange Act Sections 21(d)(3), (5) and (7), 15 U.S.C. §§ 78u(d)(3), (5) and (7); (e) ordering Al-Naji to pay civil penalties pursuant to Securities Act Section 20(d), 15 U.S.C. § 77t(d), and Exchange Act Section 21(d), 15 U.S.C. § 78u(d);  (f) permanently barring Al-Naji pursuant to Exchange Act Section 21(d)(2), 15 U.S.C. § 78u(d)(2), and Securities Act Section 20(e), 15 U.S.C. § 77t(e), from acting as an officer or director of any issuer that has a class of securities registered pursuant to Exchange Act