The U.S. Securities and Exchange Commission has dropped its civil fraud lawsuit against Nader Al-Naji, founder of the blockchain platform BitClout, now known as DeSo.
The SEC filed the case in July 2024, accusing Al-Naji of conducting an unregistered securities offering through the sale of BTCLT, the platform’s native token. Despite claiming BitClout was decentralized, the SEC alleged he maintained control over token issuance, pricing, and the treasury wallet holding investor funds.
It also accused Al-Naji of spending millions on personal expenses, including luxury housing and family transfers, while asserting treasury funds would not be used for personal gain.
In a joint stipulation, the SEC stated it reevaluated the evidence and concluded dismissal was appropriate, agreeing to drop the case with prejudice.
Al-Naji launched BitClout in 2021 as a social media-like platform where users invested in influence-based tokens. Backed by top VCs including a16z, Sequoia, and Coinbase Ventures, it later rebranded to DeSo amid criticism over data scraping and decentralization claims.
Before BitClout, Al-Naji founded Basis, an algorithmic stablecoin that raised $133 million from investors like Bain Capital Ventures and Lightspeed in 2018. Kevin Warsh, Donald Trump’s former Fed chair pick, participated as an angel investor but exited when the project shut down that year.