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:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

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

The platform also rolled out 13 tokenized funds for institutions on the Connect platform

article-image

The company’s expanded lineup introduces new ETF products, as more and more issuers get into crypto funds

article-image

President Donald Trump announced a 10% levy on almost all goods and additional tariffs on so-called “worst offending” countries

article-image

Solana may be in “recomposition” mode, as new protocols put usefulness ahead of mere virality

article-image

The stablecoin issuer will have to contend with bigger players and the interest rates environment

article-image

The president reportedly was still working on his tariff policy plans late Tuesday evening