US Withdraws Claims Against BitClout Founder

A US magistrate judge has approved a request by federal prosecutors in New York to withdraw a complaint against the founder of the DeSoc project BitClout, Nader Al-Naji, without prejudice. This was reported by Law360, citing court documents.

The SEC also filed a motion to dismiss civil charges against the entrepreneur in late February.

In the summer of 2024, authorities accused Al-Naji of wire fraud and deceiving investors in his crypto project out of at least $3 million. According to the SEC, the entrepreneur used the funds “for personal expenses, including rent for a mansion in Beverly Hills and extravagant cash gifts to family members.”

The decentralized social network BitClout tokenized profiles of popular figures on Twitter and allowed trading of these tokens, whose prices rose or fell based on the individual’s reputation.

In September 2021, the project raised $200 million from numerous investors, including Andreessen Horowitz, Coinbase Ventures, and the Winklevoss brothers.

Nevertheless, some experts initially criticized the social network, seeing signs of a pyramid scheme.

Al-Naji was also behind the stablecoin project Basis, which shut down in 2018 due to regulatory challenges, returning $133 million to investors.