Nader Al-Naji, the mastermind behind the social media platform BitClout, is facing serious allegations of fraud. The US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) claim he orchestrated a multi-million dollar scheme involving the platform’s cryptocurrency, BTCLT.
Al-Naji allegedly misled investors by falsely presenting BitClout as a decentralized project. Operating under the pseudonym “Diamondhands,” he concealed his control over the platform. Through the unregistered sale of BTCLT, he raised over $257 million in November 2020, promising investors the funds would not be used for personal gain.
However, the SEC alleges Al-Naji spent over $7 million of the investor money on a lavish lifestyle, including a Beverly Hills mansion and extravagant gifts. To avoid regulatory scrutiny, he reportedly misled a prominent law firm into believing BTCLT was not a security.
Both the SEC and the DOJ have filed charges against Al-Naji and his associates. The SEC’s Director of Enforcement, Gurbir S. Grewal, emphasized the agency’s focus on economic reality over deceptive labels.
This case highlights the risks associated with investing in cryptocurrencies and the importance of thorough due diligence.
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