On Wednesday (July 31), Bitcoin once fell to $65,306 in the early morning of the Asian session, and is still struggling at the $66,000 level. The US Securities and Exchange Commission accused Nader Al-Naji, the founder of the decentralized social platform BitClout, of fraud and unregistered issuance of crypto asset securities. The former largest crypto exchange Mt.Gox transferred another 33,964 bitcoins, and selling pressure came again.
The U.S. Securities and Exchange Commission (SEC) disclosed on its official website that it accused Nader Al-Naji of implementing a fraudulent crypto asset scheme worth hundreds of millions of dollars involving a social media platform called BitClout and its native token of the same name.
According to the SEC's lawsuit, starting in November 2020, Al-Naji raised more than $257 million through an unregistered offering and sale of BTCLT, while falsely representing that the proceeds would not be used to compensate him or other BitClout employees. In fact, the lawsuit alleges that Al-Naji used more than $7 million of investor funds for personal expenses, such as paying rent on a Beverly Hills mansion and lavish cash gifts for family members.
The SEC’s complaint further alleges that in order to evade regulation, Al-Naji portrayed BitClout as a decentralized project with “no company behind it, only tokens and code,” and launched the project using the pseudonym “Diamondhands” to further create the illusion of autonomy when in fact he was the driving force behind the project.
Additionally, Al-Naji allegedly obtained a letter from a prominent law firm that argued that BTCLT was unlikely to be considered a security under federal law based on his mischaracterization of the nature of the project. At the same time, Al-Naji allegedly secretly told certain investors that he was using this ruse to evade legal sanctions.
The SEC's lawsuit, filed in the U.S. District Court for the Southern District of New York, charges Najib with violating the registration and antifraud provisions of the Securities Act of 1933 and the antifraud provisions of the Securities Exchange Act of 1934.
The lawsuit also names Naji’s wife, mother, and entities wholly owned by him as defendants, seeking reimbursement for investor funds that Naji transferred to them. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced charges against Naji today.
Since it began paying compensation in early July, Mt.Gox has transferred out a large amount of Bitcoin funds. Currently, there are about 80,000 Bitcoins left in the wallet, and 30% is left. The impact on the Bitcoin price is gradually weakening.
Despite the negative news, the US Securities and Exchange Commission still brought good news.
The U.S. Securities and Exchange Commission withdrew its request for a court ruling to classify Solana, Cardano, Polygon and other tokens as securities in an abrupt about-face by the Biden administration on Tuesday. According to the regulator, this eliminates the need to rule on whether the current allegations against these tokens are sufficient. This means that the Biden administration no longer requires the court to rule whether the affected tokens are securities.
In its lawsuit against Binance, the SEC claims that a number of cryptocurrencies are securities. The list includes Binance Coin (BNB), Binance Dollar (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS), and Coti (COTI).
Bitcoin Technical Analysis
CryptoPotato said that a detailed analysis of Bitcoin’s daily chart shows that after decisively breaking through the 100-day moving average of $64,400, the price continues to maintain its upward momentum and move towards the key psychological resistance area of $70,000.
However, after reaching that level, the cryptocurrency lost momentum, indicating that selling pressure could increase. Nevertheless, as long as the price hovers above the 100-day and 200-day MAs, the overall market state remains bullish, with buyers aiming to set new highs in the coming days.
If Bitcoin breaks below the 100-day moving average in the near future, it would signal a clear bearish trend that could lead to a drop to the $60,000 pivot point. Overall, Bitcoin is expected to continue trading sideways in the near term before eventually finding support and sparking a new bullish momentum.
