Nader Al-Naji, the founder behind BitClout and Basis, is facing a civil lawsuit from the SEC for allegedly raising over $257 million through an unregistered securities offering.
Additionally, he is charged with wire fraud in New York.
The SEC’s lawsuit targets BTCLT, the token associated with BitClout, claiming it was marketed as an investment security without proper registration.
Al-Naji purportedly described BTCLT as comparable to stock ownership in the platform, suggesting significant potential returns for early investors.
Al-Naji allegedly sought to mislead regulators by creating a false impression of decentralization and even tried to obtain a legal opinion to falsely claim BitClout was not a securities offering.
He reportedly used the claim that no funds were raised for development to attract investment, despite using $15 million of the funds to list BTCLT on Blockchain.com.
The SEC also accuses Al-Naji of misusing the funds by paying himself, his family, and covering personal expenses like luxury rentals and credit card bills.
His wife, mother, and the DeSo Foundation are implicated in the case due to alleged transfers of funds to them.
