SEC drops $257 million case against BitClout founder
The U.S. Securities and Exchange Commission (SEC) has ended its lawsuit against BitClout founder Nader Al-Naji, a case that had been ongoing for nearly two years. The regulator filed a motion to dismiss the case in the U.S. District Court for the Southern District of New York.
According to the SEC, the decision followed a reassessment of the evidentiary record, as well as the work of a special crypto task force established in 2025 to develop a new regulatory framework for digital assets. At the same time, the agency emphasized that closing this case does not signal a broader shift in its stance toward other crypto enforcement actions.
The case was dismissed “with prejudice,” meaning the SEC cannot bring the same charges against Al-Naji or other defendants involved in the case in the future.
Allegations against the BitClout founder
The SEC filed the lawsuit in July 2024, accusing Al-Naji of raising more than $257 million through the sale of BTCLT tokens associated with the BitClout social media platform. According to the regulator, investors were told that the funds would not be used to compensate the project’s team. However, investigators alleged that part of the money was spent on personal expenses, including the rental of a luxury mansion in Beverly Hills and cash gifts to family members.The SEC also claimed that Al-Naji portrayed the platform as decentralized while allegedly maintaining effective control over the project behind the scenes. In addition to the SEC lawsuit, the U.S. Department of Justice had opened a parallel investigation into potential wire fraud. That case was also closed in February 2025.
As part of the agreement with the SEC, Al-Naji waived his right to seek reimbursement for legal fees from the regulator.
SEC’s shifting approach to the crypto industry
The dismissal of the BitClout case comes amid a gradual reassessment of the SEC’s enforcement strategy toward crypto companies. In recent months, the regulator has dropped or reconsidered several high-profile investigations.For example, the SEC and the Commodity Futures Trading Commission (CFTC) are reportedly working toward a more coordinated approach to regulating the U.S. cryptocurrency market. Analysts link these developments to the emergence of a new regulatory framework for digital assets, which may shift the focus from aggressive enforcement actions to clearer market rules.
At the same time, the growing role of spot Bitcoin ETFs and institutional investors is increasing pressure on regulators to create a more predictable legal environment for the crypto industry.
Earlier it was reported that the SEC is considering restrictions on trading tokenized stocks.
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