- Nader Al-Naji is the founder of BitClout, a blockchain social media platform that raised $257 million through a token offering.
- The SEC’s charges involve violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The U.S. Securities and Exchange Commission charged Nader Al-Naji, also known as “Diamondhands,” with fraud and selling unregistered securities.
Nader Al-Naji is the founder of BitClout, a cryptocurrency social media platform that raised $257 million through an ICO of its native token.
Founder of BitClout Arrested for Fraud and Selling Unregistered Securities
The U.S. Securities and Exchange Commission charged Nader Al-Naji, also known as “Diamondhands,” with fraud and selling unregistered securities. Founding BitClout, a blockchain social media platform, Al-Naji raised $257 million through a token offering. However, the SEC’s charges allege violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Misuse of Investor Funds
Al-Naji allegedly misled investors by claiming that the raised funds would not be used for personal expenses or paid to BitClout team members. However, it was found that over $7 million was used for personal expenses, including renting a Beverly Hills mansion and giving cash gifts to family members. This misuse of investor funds led to legal action by the SEC and the U.S. Department of Justice.
Legal Consequences
The SEC’s charges against Al-Naji include violations of federal securities laws, and the U.S. Department of Justice also filed charges against him. “Diamond Hand” was arrested and brought to court, facing accusations of deceiving investors and evading securities regulations. The case highlights the importance of transparency and compliance in the cryptocurrency industry.
