BitClout Founder Nader Al-Naji Arrested for Fraud, Faces Wire Fraud Charges
Nader Al-Naji, founder of the “BitClout” token, has been arrested and charged with defrauding an investor by falsely claiming no control over investment funds. Allegedly misusing approximately $3 million for personal expenses and gifts, Al-Naji was taken into custody on July 27, 2024, and presented before a U.S. Magistrate Judge in California. The charges, carrying a potential 20-year prison sentence, highlight a crackdown on financial deception and investor exploitation.
Because Bitcoin
July 30, 2024
Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge of the FBI’s New York Field Office, announced the arrest of Nader Al-Naji, founder and promoter of the "BitClout" token. Al-Naji was charged with defrauding a "BitClout" purchaser by falsely claiming no control over the investment funds. He was taken into custody on Saturday, July 27, 2024, and presented before a U.S. Magistrate Judge in California.
U.S. Attorney Damian Williams stated: "BitClout may have been a new token, but Nader Al-Naji’s alleged fraud was nothing new. He allegedly lied to access millions of dollars, then gave the money away to family and friends. Today’s arrest signifies this Office’s commitment to holding accountable those who use deception to enrich themselves.”
FBI Acting Assistant Director in Charge Christie M. Curtis said: “Nader Al-Naji, founder of the BitClout protocol, allegedly lied to investors and misused investments for personal expenses and gifts. Misrepresenting the use of invested funds disrupts the integrity of investing and breeds distrust. The FBI does not tolerate exploitation of investors through false promises and half-truths.”
According to the Complaint:
Al-Naji founded BitClout, a social media and cryptocurrency trading platform allowing users to buy BitClout tokens with Bitcoin, through a decentralized protocol with no centralized issuer, to trade in connection with social media profiles.
BitClout promoted itself as a “cross between a financial app and a social app,” claiming to be a decentralized protocol without employees—"just code and coins."
In January 2021, Al-Naji contacted a prospective investor (“Investor-1”) and provided marketing materials. On January 18, 2021, Al-Naji met with Investor-1, claiming the Bitcoin raised from BitClout sales would develop the protocol, and that he had no control over the funds post-purchase.
Contrary to his representations, Al-Naji retained control over the funds, using them for personal expenses and gifts. After securing approximately $3 million from Investor-1, Al-Naji routed the funds through multiple accounts for his and his family's benefit.
Al-Naji, 32, of Los Angeles, California, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and provided for informational purposes; any sentencing will be determined by a judge.
Mr. Williams praised the FBI's investigative work and thanked the SEC for its assistance. The case is overseen by the Office’s Securities and Commodities Fraud Task Force, with Assistant U.S. Attorneys Sarah Mortazavi and Nicholas Folly leading the prosecution. The charges in the Complaint are accusations, and the defendant is presumed innocent unless proven guilty.
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