On July 30th, the Securities and Exchange Commission (SEC) announced that Nader Al-Naji has been charged with defrauding investors after raising over $250 million from the unregistered sales of BitClout's native token, BTCLT. According to the SEC complaint, Al-Naji misled these investors by claiming he did not control the token proceeds and would not use the funds as compensation for himself nor other BitClout employees. Despite those explicit claims, the SEC alleges Al-Naji used investor funds to personally enrich himself, his relatives, his companies, and others close to him. A former junior world champion rower and Princeton University graduate, Nader Al-Naji also worked as a software engineer at Google before entering the world of crypto. In 2018, Al-Naji raised over $133 million for his venture, Intangible Labs, which aimed to develop a stable cryptocurrency called "Basis". After failing to deliver Basis due to regulatory concerns, Al-Naji earned himself a positive reputation in the industry when he returned all $133 million that was originally raised for the project. Al-Naji went on to found BitClout in 2021. BitClout, described as “The First Crypto Social Network", was essentially a blockchain-based social media platform where users could buy and sell tokens related to people's social profiles. In early 2022, BitClout was rebranded to DeSo (which stands for Decentralized Social). The goal of the rebrand was to add a decentralized layer that allowed for applications to be built on top of the DeSo blockchain. “As alleged in our complaint, Al-Naji attempted to evade the federal securities laws and defraud the investing public, mistakenly believing that ‘being "fake" decentralized generally confuses regulators and deters them from going after you’.
He is obviously wrong: as we have shown time and again, and as reflected in the SEC’s detailed allegations here, we are guided by economic realities, not cosmetic labels. The dedicated staff of the SEC uncovered Al-Naji’s lies and will now hold him accountable for misleading investors.”-- Gurbir S. Grewal, Director of the SEC’s Division of Enforcement Since late 2020, Nader Al-Naji has allegedly raised approximately $257 million through the sale of BTCLT. Throughout this period, Al-Naji has advertised BitClout as a decentralized project that has “no company behind it…just coins and code". The SEC alleges that the "decentralized" aspect of BitClout/DeSo is nothing more than a deception put on to avoid scrutiny from regulatory agencies, The SEC asserts that Al-Naji actually controlled the issuance of the tokens, including which investors could acquire them and at what price, as well as the proceeds from token sales; from which he used for his personal benefit. According to the SEC, Al-Naji never registered the sales of BitClout’s native token, BTCLT, with a regulator despite the token being offered and sold as a security. The SEC also alleges Al-Naji bought lavish gifts (worth at least $2.9 million) for family members, including his wife and his mother, and rented a six-bedroom mansion in Beverly Hills, California. Al-Naji's wife and mother were also named in the SEC complaint. Here is a direct link to the SEC's Complaint against Nader Al-Naji: https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-91.pdf “BitClout may have been a new token, but Nader Al-Naji’s alleged fraud was nothing new.  He allegedly lied to get access to millions of dollars, then gave the money away to family and friends.  Today’s arrest signifies this Office’s commitment to holding to account people who use deception to enrich themselves.”

Damian Williams, U.S. Attorney for the Southern District of New York According to the U.S. Department of Justice (DOJ), Nader Al-Naji was arrested on July 27th and appeared before a U.S. Magistrate Judge, in California, on the 29th. The BitClout founder is being charged by the DOJ with defrauding an investor out of $3 million by "making false and misleading representations disclaiming control over the use of the investment funds". Al-Naji is also being charged with one count of wire fraud. Here is a direct link to the U.S. Department of Justice's Complaint against Nader Al-Naji: https://www.justice.gov/usao-sdny/media/1361786/dl After a week, Nader Al-Naji finally released a public statement regarding the recent news surrounding himself and his projects. The majority of viewers deemed his response to the allegations raised against him to be unclear, which prompted Al-Naji to reply to his original tweet to clear the air. He went on to say: "I thought this was clear from the video but after reading the comments I just wanted to clarify: I believe I have abided by both the letter and spirit of the law and, what's more, have generally acted cautiously, with sound counsel, and, most importantly, in good faith."

Nader Al-Naji, Founder of BitClout and DeSo A couple of days ago, Coffeezilla, a YouTuber famous for his investigative journalism, posted a video pertaining to the Nader Al-Naji and BitClout/DeSo situation. A buddy of mine sent the video over to me and while watching I was shocked to learn that Nader Al-Naji and Coffeezilla have a history and Coffeezilla has investigated BitClout before. https://youtu.be/JAQo7J48DbU?si=x7Ghrui-J_7FP-kY&embedable=true Interestingly, I was a part of the DeSo community as a user on the Diamond application, so it is quite shocking to see the allegations levied against the founder of a platform I personally use. I wish I had known about Coffeezilla's investigations into Nader Al-Naji and BitClout before getting involved with the DeSo blockchain. Thankfully, I didn't have much money tied up in DeSo, so I didn't take that bad of a hit despite the falling price of the DESO token; which was hovering around $15 before the SEC announcement was made. Are/Were you a DeSo or BitClout user? If so, how do you feel about the situation? What do you think the future holds for DeSo and its founder, Nader Al-Naji? What are your thoughts on this news? Join the conversation below! On July 30th, the Securities and Exchange Commission (SEC) announced that Nader Al-Naji has been charged with defrauding investors after raising over $250 million from the unregistered sales of BitClout's native token, BTCLT. announced According to the SEC complaint, Al-Naji misled these investors by claiming he did not control the token proceeds and would not use the funds as compensation for himself nor other BitClout employees. Despite those explicit claims, the SEC alleges Al-Naji used investor funds to personally enrich himself, his relatives, his companies, and others close to him. A former junior world champion rower and Princeton University graduate, Nader Al-Naji also worked as a software engineer at Google before entering the world of crypto. In 2018, Al-Naji raised over $133 million for his venture, Intangible Labs, which aimed to develop a stable cryptocurrency called "Basis". After failing to deliver Basis due to regulatory concerns, Al-Naji earned himself a positive reputation in the industry when he returned all $133 million that was originally raised for the project. Al-Naji went on to found BitClout in 2021. BitClout, described as “The First Crypto Social Network", was essentially a blockchain-based social media platform where users could buy and sell tokens related to people's social profiles. In early 2022, BitClout was rebranded to DeSo (which stands for Decentralized Social). The goal of the rebrand was to add a decentralized layer that allowed for applications to be built on top of the DeSo blockchain. “As alleged in our complaint, Al-Naji attempted to evade the federal securities laws and defraud the investing public, mistakenly believing that ‘being "fake" decentralized generally confuses regulators and deters them from going after you’. He is obviously wrong: as we have shown time and again, and as reflected in the SEC’s detailed allegations here, we are guided by economic realities, not cosmetic labels. The dedicated staff of the SEC uncovered Al-Naji’s lies and will now hold him accountable for misleading investors.” -- Gurbir S. Grewal, Director of the SEC’s Division of Enforcement “As alleged in our complaint, Al-Naji attempted to evade the federal securities laws and defraud the investing public, mistakenly believing that ‘being "fake" decentralized generally confuses regulators and deters them from going after you’. He is obviously wrong: as we have shown time and again, and as reflected in the SEC’s detailed allegations here, we are guided by economic realities, not cosmetic labels. The dedicated staff of the SEC uncovered Al-Naji’s lies and will now hold him accountable for misleading investors.” -- Gurbir S. Grewal , Director of the SEC’s Division of Enforcement Gurbir S. Grewal Since late 2020, Nader Al-Naji has allegedly raised approximately $257 million through the sale of BTCLT. Throughout this period, Al-Naji has advertised BitClout as a decentralized project that has “no company behind it…just coins and code". The SEC alleges that the "decentralized" aspect of BitClout/DeSo is nothing more than a deception put on to avoid scrutiny from regulatory agencies, The SEC asserts that Al-Naji actually controlled the issuance of the tokens, including which investors could acquire them and at what price, as well as the proceeds from token sales; from which he used for his personal benefit. According to the SEC, Al-Naji never registered the sales of BitClout’s native token, BTCLT, with a regulator despite the token being offered and sold as a security. The SEC also alleges Al-Naji bought lavish gifts (worth at least $2.9 million) for family members, including his wife and his mother, and rented a six-bedroom mansion in Beverly Hills, California. Al-Naji's wife and mother were also named in the SEC complaint. Here is a direct link to the SEC's Complaint against Nader Al-Naji: https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-91.pdf https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-91.pdf “BitClout may have been a new token, but Nader Al-Naji’s alleged fraud was nothing new.  He allegedly lied to get access to millions of dollars, then gave the money away to family and friends.  Today’s arrest signifies this Office’s commitment to holding to account people who use deception to enrich themselves.” Damian Williams, U.S. Attorney for the Southern District of New York “BitClout may have been a new token, but Nader Al-Naji’s alleged fraud was nothing new.  He allegedly lied to get access to millions of dollars, then gave the money away to family and friends.  Today’s arrest signifies this Office’s commitment to holding to account people who use deception to enrich themselves.” Damian Williams, U.S. Attorney for the Southern District of New York Damian Williams , U.S. Attorney for the Southern District of New York Damian Williams According to the U.S. Department of Justice (DOJ), Nader Al-Naji was arrested on July 27th and appeared before a U.S. Magistrate Judge, in California, on the 29th. The BitClout founder is being charged by the DOJ with defrauding an investor out of $3 million by "making false and misleading representations disclaiming control over the use of the investment funds". charged Al-Naji is also being charged with one count of wire fraud. Here is a direct link to the U.S. Department of Justice's Complaint against Nader Al-Naji: https://www.justice.gov/usao-sdny/media/1361786/dl https://www.justice.gov/usao-sdny/media/1361786/dl After a week, Nader Al-Naji finally released a public statement regarding the recent news surrounding himself and his projects. public statement The majority of viewers deemed his response to the allegations raised against him to be unclear, which prompted Al-Naji to reply to his original tweet to clear the air. He went on to say: "I thought this was clear from the video but after reading the comments I just wanted to clarify: I believe I have abided by both the letter and spirit of the law and, what's more, have generally acted cautiously, with sound counsel, and, most importantly, in good faith." Nader Al-Naji, Founder of BitClout and DeSo "I thought this was clear from the video but after reading the comments I just wanted to clarify: I believe I have abided by both the letter and spirit of the law and, what's more, have generally acted cautiously, with sound counsel, and, most importantly, in good faith." Nader Al-Naji, Founder of BitClout and DeSo Nader Al-Naji , Founder of BitClout and DeSo Nader Al-Naji A couple of days ago, Coffeezilla, a YouTuber famous for his investigative journalism, posted a video pertaining to the Nader Al-Naji and BitClout/DeSo situation. video A buddy of mine sent the video over to me and while watching I was shocked to learn that Nader Al-Naji and Coffeezilla have a history and Coffeezilla has investigated BitClout before. https://youtu.be/JAQo7J48DbU?si=x7Ghrui-J_7FP-kY&embedable=true https://youtu.be/JAQo7J48DbU?si=x7Ghrui-J_7FP-kY&embedable=true Interestingly, I was a part of the DeSo community as a user on the Diamond application, so it is quite shocking to see the allegations levied against the founder of a platform I personally use. I wish I had known about Coffeezilla's investigations into Nader Al-Naji and BitClout before getting involved with the DeSo blockchain. Thankfully, I didn't have much money tied up in DeSo, so I didn't take that bad of a hit despite the falling price of the DESO token; which was hovering around $15 before the SEC announcement was made. Are/Were you a DeSo or BitClout user? If so, how do you feel about the situation? Are/Were you a DeSo or BitClout user? If so, how do you feel about the situation? What do you think the future holds for DeSo and its founder, Nader Al-Naji? What do you think the future holds for DeSo and its founder, Nader Al-Naji? What are your thoughts on this news? Join the conversation below! What are your thoughts on this news? Join the conversation below!

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