The U.S. Securities and Exchange Commission (SEC) has dropped its civil enforcement action against BitClout founder Nader Al-Naji, concluding the case with a joint stipulation filed in March 2026. The decision followed claims that Al-Naji raised $257 million through the sale of BitClout’s native token, BTCLT, allegedly using investor funds for personal expenses including a Beverly Hills mansion and luxury gifts.
The SEC charged Al-Naji with wire fraud and selling unregistered securities, while also naming several related entities as relief defendants. The case stemmed from the controversial social blockchain project DeSo, launched in 2021, which automatically generated profiles for public figures by scraping data from X, sparking legal threats over privacy violations.
Critics questioned the platform’s 'creator coin' model, citing risks of reputational manipulation and lack of liquidity, as users could not easily convert BTCLT back to Bitcoin. Despite backlash, Al-Naji secured backing from major firms including Andreessen Horowitz, Sequoia, and Coinbase Ventures.
Al-Naji and all relief defendants waived any right to legal fees or damages related to the investigation.
