As a seasoned crypto investor with a decade of experience under my belt, I’ve seen enough to know that when the SEC gets involved, it’s often not good news for the project or its founders. The latest charges against Nader Al-Naji and his associates are a stark reminder of why due diligence is so important in this space.
As a crypto investor, I recently learned that the United States Securities and Exchange Commission (SEC) and the US Attorney’s Office for the Southern District of New York have accused Nader Al-Naji, the founder of BitClout, for offering unregistered securities and deceiving investors. In simpler terms, they claim he sold these digital assets without proper authorization and misled those who invested in them.
As per the SEC’s allegation, Al-Naji garnered $257 million by offering BitClout’s token, BTCLT, without the necessary registration. The accusation claims that Al-Naji diverted around $7 million of these funds towards personal luxuries such as renting a mansion in Beverly Hills and doling out cash presents to relatives. Contrary to his pledge to investors, their money was supposed to be kept away from any form of personal remuneration.
The Securities and Exchange Commission (SEC) asserts that Al-Naji deceived investors about BitClout’s true nature. Contrary to his portrayal of BitClout as a decentralized platform without any controlling entity, the SEC alleges that Al-Naji secretly managed the project. The SEC believes this covert management was an effort to dodge regulatory oversight and give investors the impression that the project was above board.
The accusations against Al-Naji likewise involve Decentralized Social (DeSo), a related initiative. The allegation includes communications implying that Al-Naji attempted to dodge regulations by misrepresenting DeSo as a truly decentralized entity.
Gurbir S. Grewal, head of the Securities and Exchange Commission’s Enforcement Division, stated, “Al-Naji tried to trick federal securities laws and deceive investors, thinking that presenting himself as decentralized would mislead regulators.”
In the accusation, not only Al-Naji but also his spouse, mother, and associated businesses have been mentioned for allegedly receiving funds from investors. The Securities and Exchange Commission (SEC) claims that these individuals profited from the suspected fraudulent actions.
Regarding these accusations, certain investors associated with the DeSo project, including Jordan and Luke Lintz from HighKey Agency, have stated that the Securities and Exchange Commission’s assertions primarily concern BitClout. They further emphasized that the DeSo treasury has not been affected by these claims. Moreover, they expressed their lack of knowledge about Al-Naji’s personal financial transactions as detailed in the complaint.
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2024-07-31 01:40