Nader Al-Naji, a Los Angeles entrepreneur, was arrested on a wire fraud charge in connection with his BitClout venture. Authorities say he misled investors by promising funds would only be used for the business but instead used millions for personal expenses. The Securities and Exchange Commission filed a civil complaint alleging Al-Naji defrauded investors of $257 million by falsely claiming BitClout was a decentralized project with no company behind it. Al-Naji used investor funds for personal expenses like a Beverly Hills mansion and extravagant gifts, despite promises to the contrary. One investor was defrauded of $3 million, according to the U.S. Attorney’s Office in New York.
Al-Naji’s lawyer did not respond to requests for comment, and he was released on bail following his federal court appearance in Los Angeles. BitClout, described as a social media platform that combined speculation and social media, allowed users to invest in “Creator Coins” tied to the reputation of celebrities and influencers. The platform generated significant funds from investors without registering with the SEC as required. Despite Al-Naji’s claims of decentralization, he allegedly steered investor funds to himself and others associated with BitClout.
The case highlights the risks associated with cryptocurrency ventures and the importance of regulatory oversight in the industry. Investors are reminded to exercise caution and thoroughly research opportunities before committing funds. Al-Naji’s arrest serves as a warning to others in the crypto community engaging in fraudulent activities.
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