The US Securities and Exchange Commission (SEC) has charged Nader Al-Naji with orchestrating a multi-million-dollar fraud involving the cryptocurrency platform BitClout and its token, BTCLT. The SEC’s complaint alleges that since November 2020, Al-Naji raised over $257 million through unregistered sales of BTCLT while falsely assuring investors that the funds would not be used for personal gain. Instead, Al-Naji reportedly spent more than $7 million on personal expenses, including luxury real estate and cash gifts.
Al-Naji is accused of misleading investors by portraying BitClout as a decentralized project with no controlling entity, using the pseudonym “Diamondhands” to reinforce this false narrative. He allegedly sought to evade regulatory scrutiny by securing a legal opinion that BTCLT would not be considered a security, while secretly admitting to certain investors that this was a tactic to avoid legal compliance.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Al-Naji with violating both the registration and anti-fraud provisions of federal securities laws. The complaint also includes his wife, mother, and related entities as relief defendants for the funds Al-Naji allegedly transferred to them.
In addition to the SEC’s civil charges, the U.S. Attorney’s Office for the Southern District of New York has announced parallel criminal charges against Al-Naji. The SEC’s investigation, led by Geoff Gettinger and assisted by Sejal Bhakta and Pasha Salimi, highlights the agency’s commitment to holding individuals accountable for deceptive practices in the cryptocurrency market.
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