The US Securities and Exchange Commission has dismissed its civil fraud case against DeSo and BitClout founder Nader Al-Naji, bringing an end to a high-profile legal battle involving the blockchain-based social media project. Court documents show the case was dismissed with prejudice, meaning the regulator cannot bring the same claims against Al-Naji or the six related relief defendants again.
Both parties agreed to cover their own legal costs and fees as part of the resolution. The decision formally closes the civil enforcement action that had been filed in the US District Court for the Southern District of New York.
Allegations Over $257 Million Token Sale
The lawsuit, initially filed in July 2024, accused Al-Naji of raising more than $257 million through unregistered sales of BTCLT, the native token associated with the BitClout platform. Regulators claimed investors were told the funds would not be used for personal compensation.
According to the allegations, more than $7 million from investor funds was used for personal expenses, including rent for a Beverly Hills property and financial gifts to family members. Several family members and affiliated entities were listed as relief defendants in the case.
SEC Review of Evidence Leads to Dismissal
The dismissal filing states that the decision followed a reassessment of the evidentiary record and the specific circumstances surrounding the case. The filing also referenced the work of the agency’s digital asset task force established in 2025 to examine regulatory approaches to cryptocurrencies.
The regulator emphasized that the dismissal does not necessarily represent a broader position regarding other enforcement actions.
Criminal Charges Were Previously Dropped
The civil case followed an earlier decision by federal prosecutors to withdraw a related criminal wire fraud complaint. That criminal case was dismissed without prejudice in early 2025, leaving open the theoretical possibility of future charges.
Al-Naji has maintained his innocence throughout the proceedings, arguing that investigators found no evidence of wrongdoing after reviewing internal communications and documents related to the project.
Al-Naji recently wrote on X;
DeSo Project Continues Development
Al-Naji previously operated BitClout under the pseudonym “Diamondhands” before revealing his identity during the launch of the DeSo blockchain in 2021. The project attracted significant venture funding, including backing from major technology investors.
Following the dismissal, Al-Naji reiterated his intention to continue supporting the DeSo ecosystem and its development as a decentralized platform for online content.
Disclaimer
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