The SEC has filed a lawsuit against the founder of BitClout, accusing him of committing millions of dollars in cryptocurrency fraud.

ChainCatcher news reports that, according to official sources, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against BitClout founder Nader Al-Naji, accusing him of running a fraudulent cryptocurrency scheme worth millions of dollars, involving the social media platform BitClout and its native token BTCLT. Since November 2020, Al-Naji has raised over $257 million from the unregistered BTCLT issuance and falsely informed investors that the funds would not be used for personal compensation.

The SEC alleges that Al-Naji described BitClout as a decentralized project, using the alias "Diamondhands" to evade regulatory scrutiny. In reality, Al-Naji used over $7 million of investor funds for personal expenses, including renting a mansion in Beverly Hills and giving luxurious cash gifts to family members. Meanwhile, the U.S. Attorney's Office for the Southern District of New York has also brought charges against Al-Naji.