U.S. authorities have scrapped charges against the founder of decentralized social network BitClout, court documents show.
Last year, feds hit Nader Al-Naji with one count of wire fraud, alleging that he defrauded investors of $3 million with his crypto project.
The Department of Justice alleged at the time that Nader "lied to get access to millions of dollars, then gave the money away to family and friends," spending investor cash on a lavish lifestyle.
Inside BitClout, the Dystopian Social Network with Big Backers and Vocal Critics
Diamondhands greets me on the encrypted messaging app Signal. He can see me over video, but his own video is turned off, and he has asked me not to use his real name—a curious demand given that Diamondhands has uploaded the images of thousands of people to his platform BitClout without their permission in order to sell cryptocurrency tied to their identities. "If you can mix speculation with social media, you can have an amazing product. This will change the world for the better," says Diamondha...
But as first reported by Law360 on Monday, a Feb. 28 order shows that U.S. Magistrate Judge Henry J. Ricardo approved a request from New York federal prosecutors to withdraw the complaint without prejudice against Al-Naji.
And the Securities and Exchange Commission, which had also accused Al-Naji of fraud, also filed in late February to drop its civil charges against the entrepreneur. The regulator last year had alleged that Al-Naji perpetrated a "multi-million-dollar fraudulent crypto asset scheme" and spent the money on himself.
Neither the SEC nor the DOJ immediately responded to Decrypt's requests for comment.
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Ex-Google engineer Al-Naji ran BitClout, a decentralized social network that tokenized Twitter personalities. The idea with the project was that users could build a following and earn money from their profiles.
Prominent investors in the space—including Andreessen Horowitz, Coinbase Ventures, and Gemini's Winklevoss twins—all threw money at the project.
Decrypt spoke to Al-Naji about BitClout back in 2021 and found that the project had a number of vocal critics, with users complaining that the launch was not running on time.
Edited by Andrew Hayward
