SEC charges BitClout founder with fraud and unregistered offering of crypto

The SEC has charged Nader Al-Naji, founder of the BitClout blockchain protocol (now called Decentralized Social, or DeSo), with fraud and an unregistered offering of its BTCLT token. According to the SEC's complaint, Al-Naji raised more than $257 million from BTCLT sales starting in November 2020, while falsely telling investors the proceeds would not compensate him or other employees. The complaint alleges he spent more than $7 million of investor funds on personal expenses, including rent for a Beverly Hills mansion and cash gifts to family members. It also alleges he portrayed BitClout as decentralized with "no company behind it" and used the pseudonym "Diamondhands" to evade regulatory scrutiny.