The U.S. Securities and Exchange Commission (SEC) has formally and permanently dropped its civil fraud lawsuit against Nader Al-Naji, the founder of the BitClout social media platform and the DeSo blockchain. The dismissal was filed with prejudice in the U.S. District Court for the Southern District of New York on March 14, 2026, meaning the SEC is barred from ever refiling the same claims against Al-Naji or the six relief defendants, which included his wife, mother, and affiliated entities.
The SEC's original complaint, filed in July 2024, alleged that Al-Naji raised more than $257 million from unregistered sales of the BTCLT token while misleading investors by claiming the funds would not be used for personal enrichment. The agency accused him of diverting over $7 million for personal expenses, including rent for a Beverly Hills mansion and cash gifts to family members.
The joint stipulation for dismissal cites a "reassessment of the evidentiary record and the case's particular facts and circumstances" as the basis for the decision. The SEC also explicitly connected the move to the formation of its Crypto Task Force in January 2025, which was launched under then-Acting Chairman Mark T. Uyeda with a mandate to shift focus from enforcement-led regulation toward clearer rulemaking for digital assets.
As part of the settlement, Al-Naji and the relief defendants waived any claims for reimbursement of legal fees against the U.S. government and released all related claims against the SEC and its employees. The agency was careful to note that the dismissal does not reflect its position on any other case.
This civil resolution follows the Department of Justice's (DOJ) earlier decision to drop its parallel criminal wire fraud charge against Al-Naji in February 2025. That dismissal was without prejudice, but prosecutors have not refiled. After the DOJ's move, Al-Naji publicly asserted his innocence on social media, stating investigators found no wrongdoing after reviewing his private communications and that the referenced investor was still profitable.
The dismissal adds to a series of SEC enforcement retreats in the crypto space under the current administration, which has seen cases dropped or paused against firms like Coinbase, Kraken, Consensys, and Ripple. Unlike many of those cases, which centered on regulatory classification of tokens, the Al-Naji case was based on allegations of outright fraud and investor deception.
