SEC Drops Case Against BitClout Founder Nader Al-Naji

The Securities and Exchange Commission (SEC) has dropped its case against BitClout founder Nader Al-Naji and relief defendants, a recent filing with the United States District Court in the Southern District of New York shows. 

The civil enforcement action, originally filed in July 2024, has been dismissed after a “reassessment of the evidentiary record.” 

“In the exercise of its discretion, the Commission believes dismissal of the claims against Defendant and Relief Defendants is appropriate,” the filing reads. 

The jointly stipulated filing was signed by representatives for the SEC and defendants in the last two weeks and officially filed on March 12. 

Al-Naji, a former Google engineer, ran decentralized social networking site BitClout, which tokenized user profiles on Twitter (now X). 

The platform, which asked users to exchange Bitcoin for BitClout tokens in order to claim their profiles, ultimately earned funding from notable firms like Andreessen Horowitz (a16z) and Coinbase Ventures, as well as the founders of crypto exchange Gemini, Tyler and Cameron Winklevoss. 

Years after the site’s launch though, Al-Naji was hit with charges by the Department of Justice and the SEC, with the Justice Department alleging that he “lied to get access to millions of dollars, then gave the money away to family and friends.” The agency charged him with one count of wire fraud. 

Last March, though, the charges from the DOJ were dropped and the complaint was withdrawn without prejudice. Despite that, the SEC’s lawsuit against Al-Naji, which alleged that he raised more than $257 million in unregistered securities and sales of the BitClout token, was still outstanding as the sides worked on a resolution. 

Now that too has been dismissed, adding the BitClout founder’s case to the list of notable crypto enforcement actions or lawsuits that have been disbanded or dropped since President Trump’s more crypto-friendly administration has taken the helm. 

Since President Trump returned to the White House last year, cases against financial services firm Ripple, Coinbase, and other prominent crypto firms have since been dismissed by the SEC. 

Earlier this month, the Commission moved to settle a case with Tron founder Justin Sun, which required Rainberry Inc., the company behind the BitTorrent protocol, to pay a $10 million civil penalty.