SEC Drops Case Against BitClout Founder Nader Al-Naji With Prejudice

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• SEC dismissed its case against BitClout founder Nader Al-Naji with prejudice.
• The decision followed a reassessment of the evidentiary record.
• Al-Naji had been accused of raising over $257 million through token sales.
• The dismissal prevents the SEC from refiling the same charges.

SEC Ends Enforcement Case Against BitClout Founder

The US Securities and Exchange Commission (SEC) has formally dismissed its enforcement case against BitClout founder Nader Al-Naji, ending a legal dispute that had been ongoing for nearly two years.

According to a joint dismissal stipulation filed in the US District Court for the Southern District of New York, the regulator decided to drop the case after conducting a reassessment of the evidentiary record. The filing also referenced the agency’s crypto task force, established in January 2025 to develop a regulatory framework for digital assets. The SEC dismissed the case with prejudice, meaning the agency cannot bring the same charges against Al-Naji or related defendants again.

However, the regulator emphasized that the outcome should not be interpreted as a precedent for other crypto enforcement cases.

“The Commission’s decision to exercise its discretion and seek dismissal of this litigation is based on the particular facts and circumstances of this case,” the SEC stated.

Background of the SEC Complaint: The SEC originally filed its complaint in July 2024, alleging that Al-Naji raised more than $257 million through sales of the BitClout platform’s native token, BTCLT. According to the complaint, investors were allegedly told that funds raised from the token sale would not be used to compensate team members. The regulator also accused Al-Naji of using more than $7 million for personal expenses, including rent for a Beverly Hills mansion and cash gifts to family members.

The complaint further claimed that BitClout was presented as a decentralized platform without a governing company, while Al-Naji was allegedly running the project behind the scenes.Al-Naji is a former Google engineer and the creator of the DeSo blockchain, which later became the underlying infrastructure supporting the BitClout ecosystem.

Settlement Terms and Legal Outcome

As part of the agreement to dismiss the case, Al-Naji waived any claims against the SEC for reimbursement of legal fees or related expenses. The dismissal also extends to several relief defendants mentioned in the original complaint, including Al-Naji’s family members and companies connected to the project.

Separately, the US Department of Justice (DOJ) had previously ended a parallel criminal investigation accusing Al-Naji of wire fraud in February 2025, dismissing that case without prejudice.

Founder Responds to Case Dismissal

Following the earlier DOJ dismissal, Al-Naji said the investigation did not uncover evidence of wrongdoing. In a post on X, he stated that authorities had thoroughly reviewed his communications and documents during the investigation but did not find proof of criminal activity. He described the outcome as a significant relief for himself, his family, and the broader DeSo ecosystem.

Broader Shift in Crypto Enforcement

The dismissal comes amid what some observers describe as a gradual shift in the SEC’s enforcement posture toward the crypto industry. Under the Trump administration, the regulator has withdrawn or reconsidered several enforcement actions against digital asset companies, reflecting ongoing policy discussions around crypto regulation in the United States. While the SEC has not signaled a broad policy change, the decision to drop the BitClout case adds to a growing list of enforcement actions that have been reconsidered.