Nader Al-Naji, founder of BitClout, faces charges from the SEC for selling unregistered securities and defrauding investors.
Points
- Nader Al-Naji is accused of selling unregistered securities.
- The SEC alleges Al-Naji misled investors about BitClout’s decentralization.
- Al-Naji’s wife, mother, and related business entities are also named in the complaint.
- Some investors in DeSo claim the SEC’s charges are only related to BitClout.
- HighKey Agency founders distanced themselves from Al-Naji’s personal dealings.
The United States Securities and Exchange Commission （SEC） and the US Attorney’s Office for the Southern District of New York have charged Nader Al-Naji, founder of BitClout, with fraud and selling unregistered securities. Al-Naji allegedly misled investors about the true nature of BitClout, promoting it as a decentralized platform while secretly managing it to evade regulatory scrutiny.
The SEC’s complaint extends to Decentralized Social （DeSo）, another project linked to Al-Naji. According to the SEC, Al-Naji falsely portrayed DeSo as decentralized to avoid regulation, similarly to BitClout.
SEC’s Division of Enforcement Director, Gurbir S. Grewal, stated that Al-Naji tried to deceive regulators by pretending to be decentralized, thinking it would deter scrutiny. Al-Naji’s wife, mother, and related business entities are also named in the complaint for receiving investor funds.
In response, Jordan and Luke Lintz, founders of HighKey Agency and investors in DeSo, asserted that the SEC’s allegations pertain solely to BitClout, and DeSo’s treasury remains unaffected. They emphasized their lack of knowledge regarding Al-Naji’s personal financial activities mentioned in the complaint.
Analysis
- Regulatory Impact: The case underscores the SEC’s rigorous stance on unregistered securities and fraud in the crypto space.
- Investor Reactions: The involvement of family members and related entities highlights potential misuse of investor funds.
- Market Perception: HighKey Agency’s response aims to distance DeSo from BitClout’s legal troubles, reflecting the broader implications for investor confidence in related projects.