Misappropriation of investor funds? SEC sues BitClout founder

The SEC has filed charges against the founder of decentralized social media platform BitClout. To be precise, Nader Al-Naji is accused of fraud and selling unregistered securities.

According to the SEC, the BitClout founder allegedly used money from token sales for private purposes. For example, Al-Naji allegedly "spent more than seven million dollars of investor money on personal expenses such as rent payments for a villa in Beverly Hills and large cash gifts to family members."

In addition, investors were allegedly deliberately misled by promoting BitClout as a decentralized project, "when in reality he was behind the project."

"Our indictment alleges that Al-Naji attempted to mislead investors and evade federal securities laws. He did this by leading them to believe that the illusion of decentralization would mislead regulators and avoid legal prosecution" said SEC Director Gurbir S. Grewal. The suit was filed in U.S. District Court in New York.