By Mark Hunter
10 hours agoWed Mar 19 2025 10:16:53
Reading Time: 2 minutes
- U.S. authorities have withdrawn fraud charges against Nader Al-Naji, the founder of BitClout
- Al-Naji was previously accused of defrauding investors of $3 million through his cryptocurrency project
- Both the Department of Justice and the Securities and Exchange Commission have formally dismissed their cases, marking a significant legal victory for Al-Naji
U.S. authorities have officially dropped fraud charges against Nader Al-Naji, the founder of the decentralized social network BitClout. He had faced allegations of misleading investors and misusing funds, with both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) pursuing legal action against him. The dismissal of charges will come as a huge relief to Al-Naji and represents another development in the changing regulatory scrutiny of cryptocurrency projects.
“Multi-Million-dollar Fraud”
Al-Naji, a former Google engineer, launched BitClout as a decentralized social network where users could invest in the tokens of social media personalities. The platform drew major backing from investors like Andreessen Horowitz, Coinbase Ventures, and the Winklevoss twins but faced criticism for its lack of transparency.
In 2024, federal prosecutors accused Al-Naji of wire fraud, claiming he defrauded investors out of $3 million and used the money for personal expenses. The DOJ alleged that he had misrepresented BitClout’s financial status while secretly diverting funds to family and associates. The SEC also launched a civil suit, accusing Al-Naji of running a “multi-million-dollar fraudulent crypto asset scheme” that deceived investors.
Good News or Bad News?
In a surprising move, both the DOJ and SEC filed to dismiss their cases against Al-Naji in late February 2025, with court documents showing that U.S. Magistrate Judge Henry J. Ricardo granted the DOJ’s request to withdraw its complaint without prejudice, effectively dropping the criminal charges. The SEC soon followed suit, withdrawing its civil case.
The decision to drop charges raises questions about regulatory oversight in the cryptocurrency industry; some experts see it as a sign that authorities may be struggling to enforce securities laws on crypto projects, while others argue that the case lacked sufficient evidence. This outcome could influence future enforcement actions, shaping how crypto founders are held accountable in the U.S.
