фото показано с : bravenewcoin.com

Al-Naji faces allegations of orchestrating a fraudulent scheme involving the unregistered offering and sale of crypto asset securities, resulting in over $257 million being raised from investors under false pretences.

The SEC’s complaint, which has been filed in the U.S. District Court for the Southern District of New York, paints a damning picture of Al-Naji’s activities. It alleges that starting in November 2020, Al-Naji raised substantial funds through the sale of BitClout’s native token, BTCLT. Investors were led to believe that the proceeds from these sales would not be used for personal gain or to compensate BitClout employees. 

However, the SEC contends that Al-Naji misappropriated more than $7 million of investor funds for personal expenditures, including the rental of a luxurious Beverly Hills mansion and substantial cash gifts to his family members.

In an effort to evade regulatory scrutiny, Al-Naji purportedly portrayed BitClout as a decentralized project with “no company behind it … just coins and code.” He launched the project under the pseudonym “Diamondhands,” aiming to create the illusion that the project was autonomous. Despite these claims, the SEC alleges that Al-Naji retained direct control over the network and was the driving force behind the project. 

Moreover, Al-Naji allegedly secured a misleading opinion letter from a prominent law firm, based on his misrepresentations about the nature of the project, which asserted that BTCLT was unlikely to be classified as securities under federal law.

Al-Naji’s deception extended beyond misleading investors and legal firms. He reportedly confided in select investors that his actions were specifically designed to avoid compliance with federal securities laws. Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the gravity of the allegations, stating, “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.’ He is obviously wrong: as we have shown time and again, and as reflected in the SEC’s detailed allegations here, we are guided by economic realities, not cosmetic labels. The dedicated staff of the SEC uncovered Al-Naji’s lies and will now hold him accountable for misleading investors.”

The complaint charges Al-Naji with violating the registration and anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Additionally, the complaint names Al-Naji’s wife, mother, and wholly-owned entities as relief defendants for the investor funds that Al-Naji allegedly transferred to them. In parallel to the SEC’s action, the U.S. Attorney’s Office for the Southern District of New York has announced similar charges against Al-Naji.

The investigation was conducted by Geoff Gettinger with the assistance of Sejal Bhakta and Pasha Salimi. It was supervised by Paul Kim and Jorge G. Tenreiro, Acting Chief of the Enforcement Division’s Crypto Assets and Cyber Unit. The SEC’s litigation will be led by Christopher Carney and Mr. Gettinger, under the supervision of James Connor and Mr. Tenreiro.

This case highlights the ongoing challenges and regulatory scrutiny facing the rapidly evolving crypto asset space. The SEC’s actions underscore the importance of transparency and compliance with federal securities laws, regardless of the decentralized nature of a project.

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