The U.S. SEC has charged BitClout founder Nader Al-Naji with fraud, alleging he misled investors about the project’s decentralization and misused their funds for personal expenses.
Points
- The SEC charged BitClout founder Nader Al-Naji with fraud.
- Al-Naji allegedly misled investors about BitClout’s decentralization.
- He is accused of using investor funds for personal expenses, including rent on a Beverly Hills mansion.
- The U.S. Attorney’s Office for the Southern District of New York also announced charges against Al-Naji.
The U.S. Securities and Exchange Commission （SEC） has charged BitClout founder Nader Al-Naji with fraud, alleging that he misled investors about the decentralized nature of the project and misused investor funds for personal expenses. The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, outlines how Al-Naji raised over $257 million from the “unregistered offers and sales” of BitClout’s native token, BTCLT.
Al-Naji, 32, allegedly lied to investors, claiming that the funds would not be used to reimburse himself or BitClout employees. However, the SEC contends that Al-Naji spent more than $7 million of investor funds on personal items, including rent on a six-bedroom mansion in Beverly Hills and “extravagant cash gifts” to family members.
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, stated, “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 complaint also names Al-Naji’s wife and mother as defendants. In parallel, the U.S. Attorney’s Office for the Southern District of New York has announced charges against Al-Naji, further intensifying the legal challenges he faces.
Al-Naji, who previously went by the pseudonym Diamondhands, revealed his identity in 2021 when launching “Decentralized Social.” The blockchain received $200 million in funding from high-profile venture firms, further highlighting the gravity of the SEC’s allegations.
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解説
- SEC’s Allegations: The SEC’s charges against Nader Al-Naji highlight serious allegations of fraud and misuse of investor funds. The emphasis on misleading investors about decentralization reflects the importance of transparency in the crypto space.
- Misuse of Funds: Al-Naji’s alleged use of $7 million for personal expenses, including luxury items and real estate, underscores the potential for abuse in unregulated fundraising activities.
- Legal Implications: The involvement of both the SEC and the U.S. Attorney’s Office indicates a robust legal response to alleged fraud in the crypto industry. This case may set a precedent for future regulatory actions.
- Investor Caution: The allegations against Al-Naji serve as a cautionary tale for investors to conduct thorough due diligence and be wary of claims about decentralization and fund usage.
- Impact on BitClout: The legal challenges faced by Al-Naji and the scrutiny on BitClout could impact the project’s reputation and investor confidence, highlighting the need for regulatory compliance and transparency.