According to TechFlow, on July 30, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against BitClout founder Nader Al-Naji, accusing him of a multi-million dollar fraudulent crypto asset scheme involving the social media platform BitClout and its native token BTCLT. Since November 2020, Al-Naji has raised more than $257 million from the unregistered BTCLT offering and falsely informed investors that the funds would not be used for personal compensation.
The SEC accused Al-Naji of describing BitClout as a decentralized project and using the pseudonym "Diamondhands" to circumvent regulatory scrutiny. In reality, Al-Naji used more than $7 million of investor funds for personal expenses, including renting a Beverly Hills mansion and giving lavish cash gifts to his family. At the same time, the U.S. Attorney's Office for the Southern District of New York also filed charges against Al-Naji.
