BitClout Founder's SEC Legal Battle Ends with Prejudicial Dismissal
Following a comprehensive reevaluation of the available evidence and exercising regulatory discretion, the SEC has terminated its legal proceedings against Nader Al-Naji, creator of the BitClout platform.
The United States Securities and Exchange Commission (SEC) has terminated its legal proceedings spanning two years against Nader Al-Naji, who established the blockchain-powered social networking platform BitClout.
According to the joint stipulation for dismissal submitted to the US District Court for the Southern District of New York this past Thursday, the SEC referenced the cryptocurrency task force—which received its mandate to create a regulatory structure for digital assets in January 2025—along with a "reassessment of the evidentiary record" as justification for the case dismissal.
The regulatory body emphasized in its public statement, though, that this particular resolution shouldn't be interpreted as a precedent for how other comparable enforcement proceedings might be handled.
"The Commission's decision to exercise its discretion and seek dismissal of this litigation is based on the particular facts and circumstances of this case and does not necessarily reflect the Commission's position on any other case," it said.
Cointelegraph has contacted the SEC and the DeSo blockchain, where Al-Naji leads the foundation, for comment.
Accusations included spending money on a mansion
Al-Naji's background includes working as an engineer at Google, establishing the Basis protocol, and developing the DeSo blockchain. BitClout was his creation, which he brought to the public market in March 2021.
In its complaint filed during July 2024, the SEC alleged that Al-Naji had secured upwards of $257 million through the sale of BTCLT, BitClout platform's native digital token, all while assuring investors that these funds would not be allocated toward compensating anyone on the BitClout team.
Additional allegations against Al-Naji included the expenditure of over $7 million on items for personal use, such as rental payments for a Beverly Hills mansion and monetary gifts provided to family members, along with misrepresenting the platform's operational structure as being decentralized without any single company exercising control, despite purportedly managing the project from behind the curtain personally.
Under the terms of the settlement agreement, Al-Naji has relinquished any right to seek compensation for attorney fees or other expenses from the SEC. The regulatory agency has dismissed the case with prejudice, which prevents it from filing another legal action against Al-Naji or the relief defendants identified, including his mother, wife, and multiple entities under his ownership, using these same allegations.
The Department of Justice also ended a separate case accusing Al-Naji of wire fraud in February 2025 without prejudice. Al-Naji said in an X post at the time the case was dismissed because the government's case didn't hold up under scrutiny.
During the current Trump administration's tenure, the SEC has gradually been reversing its aggressive regulatory approach toward cryptocurrency businesses, dropping an increasing volume of enforcement cases targeting digital asset companies.