Key Points
The Securities and Exchange Commission said in a civil complaint filed in Manhattan federal court that Al-Naji began designing BitClout in 2019 as a social media platform with an interface that promised to be a new type of social network that mixes speculation and social media..
The BitClout platform invited investors to monetize their social media profile and to invest in the profiles of others through Creator Coins whose value was tied to the reputation of an individual or their standing in society, the commission said..
From late 2020 through March 2021, Al-Naji solicited investments to fund BitClout's development from venture capital funds and other prominent investors in the crypto-asset community, the commission said..
In all, BitClout generated $257 million for its treasury wallet from investors without registering, as required, with the Securities and Exchange Commission, the agency said..
The Securities and Exchange Commission said Al-Naji used investor funds to pay his own living expenses, including renting a six-bedroom Beverly Hills mansion, and he gave extravagant gifts of cash of at least $1 million each to his wife and his mother, along with funding personal investments in other crypto asset projects..
