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BitClout's creator evades fraud allegation as the Justice Department abandons the legal action.
In intriguing fashion, U.S. legal proceedings against the founder of the groundbreaking social network BitClout have taken an unexpected twist.
Federal authorities appear to have abandoned their case against Nader Al-Naji. According to court documents, this decision has been made.
Initially facing a single charge of wire fraud, Al-Naji was accused of deceiving investors and pocketing $3 million from his cryptocurrency project[2]. FBI investigators alleged that Al-Naji misled people, spending the funds on luxurious indulgences and dishing out cash to his inner circle.
However, a recently-surfaced court order dated February 28 shows that U.S. Magistrate Judge Henry J. Ricardo approved a request from New York prosecutors to terminate the complaint against Al-Naji[3]. At the time of this writing, the Department of Justice had not responded to Decrypt's queries regarding this sudden withdrawal of charges.
In 2021, Al-Naji managed BitClout, a decentralized social networking platform that tokenized Twitter personas. By amassing a following, users could generate income from their online profiles.
BitClout witnessed substantial financial backing from notable investors, including Andreessen Horowitz, Coinbase Ventures, and the Winklevoss twins' Gemini[4].
We at Decrypt spoke with Al-Naji about BitClout back then, and it seemed that the project faced vocal criticisms from users, primarily concerning the delays in launch[5].
Subsequently, it was misreported that the SEC had also dropped its case against Al-Naji. However, a March Filing indicates that the legal proceedings are still ongoing, with both parties discussing possible resolution following the DOJ's dismissal[6].
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[1] Dragonfly data and analysis on Nader Al-Naji - [source]
[2] Initial accusations of wire fraud against Nader Al-Naji – [source]
[3] Court order approving withdrawal of complaint against Nader Al-Naji – [source]
[4] Key investors in BitClout – [source]
[5] Decrypt's 2021 conversation with Nader Al-Naji about BitClout – [source]
[6] Ongoing legal proceedings between the SEC and Nader Al-Naji following DOJ dismissal – [source]
- The founder of BitClout, a decentralized social networking platform that tokenized Twitter personas, had initially faced allegations of wire fraud and misleading investors.
- BitClout received significant financial backing from notable cryptocurrency investors, including Andreessen Horowitz, Coinbase Ventures, and the Winklevoss twins' Gemini.
- Despite initial legal proceedings against Nader Al-Naji, a U.S. Magistrate Judge approved a request from New York prosecutors to terminate the complaint against him.
- amassing a following on BitClout could potentially generate income from cryptocurrency tokens linked to users' online profiles, demonstrating the intersection of technology, business, and finance in the realm of decentralized cryptocurrency.
