Founder of BitClout, Nader Al-Naji, Charged with Fraud and Selling Unregistered Securities
Nader Al-Naji, also known as “Diamondhands,” is facing charges from the U.S. Securities and Exchange Commission for fraud and selling unregistered securities. The SEC’s charges involve violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Al-Naji is the founder of BitClout, a cryptocurrency social media platform that raised $257 million through an ICO of its native token.
Allegations and Arrest of Nader Al-Naji
Allegedly, Al-Naji misled investors by stating that the raised funds would not be used for personal expenses or paid to BitClout team members. However, it is reported that he used over $7 million for personal use, including renting a Beverly Hills mansion and giving cash gifts to family members. The Securities and Exchange Commission reported these findings in a news release.
“As alleged in our complaint, Al-Naji attempted to evade federal securities laws and deceive the investing public by falsely believing that ‘fake’ decentralization would confuse regulators and prevent them from taking action,” stated Gurbir S. Grewal, head of the SEC’s Enforcement Division.
Legal Action and Consequences
Aside from the SEC charges, the U.S. Department of Justice also filed charges against Al-Naji, leading to his arrest on Saturday. The U.S. Attorney’s Office for the Southern District of New York announced the charges and brought him to court on Monday. The legal actions taken against Al-Naji highlight the severity of the allegations and the consequences he may face.
