SEC, DOJ charge BitClout founder Nader Al-Naji

The founder, who went by the pseudonym Diamondhands, was accused of using investor funds for personal use

article-image

Artwork by Crystal Le

share

BitClout creator Nader Al-Naji, who went by the pseudonym Diamondhands, was charged by the US Securities and Exchange Commission and the Department of Justice on Tuesday.

The SEC alleges that Al-Naji conducted a “multi-million dollar fraudulent crypto asset scheme involving a social media platform called BitClout and its native token of the same name.”

A complaint against the founder alleges that he raised over $250 million in the unregistered sales and offerings of BTCLT. The funds, he supposedly claimed to investors, wouldn’t go to him or his team.

Al-Naji spent over $7 million of investor funds, according to the regulatory agency.

“Among other expenditures, Al-Naji used investor funds to: pay his own living expenses, including the rental of a six-bedroom mansion in Beverly Hills and personal credit card payments; fund extravagant gifts of cash (of at least $1 million each) to his wife, Relief Defendant Buse Desticioğlu Al-Naji, and his mother Relief Defendant Joumana Bahouth Al-Naji,” the complaint said.

Read more from our opinion section: Crypto crime is too easy

The founder was also charged by the DOJ’s Southern District of New York office. 

“As alleged in our complaint, Al-Naji attempted to evade the federal securities laws and defraud the investing public, mistakenly believing that ‘being ‘fake’ decentralized generally confuses regulators and deters them from going after you,’” said Gurbir S. Grewal, director of the SEC’s division of enforcement.

In 2021, Al-Naji rebranded BitClout to DeSo, or “decentralized social,” opening the network up to apps other than BitClout. He initially raised over $200 million from firms such as Andreessen Horowitz and Winklevoss Capital. 

BitClout’s operational bitcoin wallet, which collected BTC during its initial coin offering, still contains 2,525 BTC ($167.3 million). It originally raised 5,039 BTC ($333.8 million at current prices).

Al-Naji’s previously faced criticism, including being accused of operating Ponzi schemes. 

Loading Tweet..

Byrne, a crypto lawyer, wrote about the Al-Naji-linked algorithmic stablecoin Basis back in 2017 before it failed in 2018.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

Bitcoin needs a price, but its magic runs deeper

article-image

Circle had a pretty successful first day of trading, but what’s next for the stablecoin issuer?

article-image

Solana’s USDC caught a boost after being paired with the TRUMP memecoin

article-image

The stablecoin issuer’s successful first day of trading is likely to spur more crypto IPOs, industry watchers say

article-image

Job openings rallied and continuing claims stalled ahead of May’s employment report

article-image

A group of Twitch streamers battle for bitcoin. Will their chats help them?