The Securities and Exchange Commission (SEC) charged BitClout Founder Nader Al-Naji with perpetrating a multi-million dollar fraud scheme, and the offering of unregistered securities.
Al-Naji led the Social-Fi project Bitclout, which raised over $200 million from notable investors such as a16z, Winklevoss Capital, and Alexis Ohanian’s Seven-Seven-Six.
The SEC alleges that Al-Naji portrayed Bitclout as a decentralized project with “no company behind it” and misled investors into believing that the platform was fully autonomous, while he ran it from behind the scenes.
Grubis Grewal, the director of the SEC’s Division of Enforcement said, “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.”
The complaint also alleges that Al-Naji spent $7 million of investor funds personally, including rental payments for a mansion in Beverly Hills.
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