SEC Dismisses Charges Against BitClout Founder in $250M Crypto Scheme Case

The U.S. Securities and Exchange Commission has abruptly dropped its high-profile case against BitClout founder Nader Al-Naji, ending a nearly two-year legal battle over an alleged $250 million crypto scheme. The dismissal, filed in federal court, represents a significant retreat by the regulator and delivers a major victory to the crypto entrepreneur just months before a scheduled trial.

BitClout Founder Cleared Of SEC Charges

In a recent court filing, the SEC announced that it had reassessed the evidentiary record and concluded that dismissing the claims against Al-Naji and the associated Relief Defendants was appropriate. “In the exercise of its discretion, the Commission believes dismissal of the claims is appropriate,” the filing stated.

The SEC’s initial lawsuit accused Al-Naji of raising over $257 million through unregistered offers and sales of the BitClout blockchain’s native token, BTCLT, since November 2020. 

The complaint alleged that he misled investors by falsely claiming that the funds would not be used for personal gain. At the time, the SEC contended that Al-Naji had misappropriated more than $7 million of investor money for personal expenses, which included “extravagant gifts” and rental payments for a Beverly Hills mansion.

According to the SEC’s complaint, Al-Naji took extensive measures to present BitClout as a decentralized platform devoid of central authority. To maintain this façade, he allegedly operated under the pseudonym “Diamondhands.” 

The SEC also claimed that he procured legal opinions asserting the non-securities status of BTCLT while misrepresenting the project’s actual nature, ultimately disclosing deceptive practices only to select investors.

SEC Drops 60% Of Active Crypto Cases

The dismissal adds Al-Naji to the growing list of cases dropped since President Donald Trump took office and appointed Paul Atkins, a pro-crypto advocate, to lead the agency.

Since January 2025, the SEC has dismissed or paused roughly 60% of its active cryptocurrency cases, including high-profile actions involving major players like Binance, Coinbase, Ripple, and Kraken.

Featured image from OpenArt, chart from TradingView.com