The U.S. Securities and Exchange Commission has dropped its two-year case against Nader Al-Naji, the founder of the blockchain-based social media platform BitClout.
According to a joint dismissal filing submitted Thursday in the United States District Court for the Southern District of New York, the regulator said the decision followed a reassessment of the evidence and consultation with a crypto task force established in January 2025 to help develop a clearer regulatory framework for digital assets.
The SEC emphasized that the dismissal should not be interpreted as a signal that similar enforcement actions will be treated the same way. The agency said the decision was based on the specific facts and circumstances surrounding this case.
Allegations over investor funds
Al-Naji, a former engineer at Google and the creator of the DeSo blockchain, publicly launched BitClout in March 2021. He was also previously known for founding the Basis protocol.
In a complaint filed in July 2024, the U.S. Securities and Exchange Commission alleged that Al-Naji raised more than $257 million through sales of BitClout’s native token, BTCLT. Regulators claimed investors were told the proceeds would not be used to compensate BitClout team members.
The SEC further alleged that Al-Naji spent more than $7 million on personal expenses, including rent for a mansion in Beverly Hills and cash gifts to family members. The regulator also accused him of misleading investors by portraying the platform as fully decentralized with no controlling entity, while allegedly maintaining control behind the scenes.
Case dismissed with prejudice
Under the terms of the settlement, Al-Naji waived any claims seeking reimbursement of legal fees or other costs from the SEC. The case was dismissed with prejudice, meaning the regulator cannot bring the same charges against him or related parties again. This protection also applies to several relief defendants, including his mother, wife and companies connected to him.
Separately, the United States Department of Justice dropped a related wire fraud case against Al-Naji in February 2025 without prejudice. At the time, Al-Naji said in a post on X that the case had been dismissed because the government’s claims did not withstand scrutiny.
Under the Trump administration, the SEC has slowly been walking back its hardline stance toward crypto firms, dismissing a growing number of enforcement actions against crypto firms.
