SEC drops civil case against BitClout founder Nader Al-Naji after review. Lawsuit over $257M token sale ends with no fines or penalties.
The U.S. Securities and Exchange Commission has dismissed its civil fraud case against Nader Al-Naji, founder of BitClout, now called DeSo. The decision concludes a lawsuit filed in 2024 over token sales calculated at $257M. The dismissal was based on a review of the facts and policy changes, regulators said. The case closed with no fines or penalties.
SEC Drops Civil Lawsuit Against BitClout Founder
A joint filing to the Southern District of New York confirmed the case dismissal. The SEC and Nader Al-Naji agreed to terminate with prejudice the civil enforcement action. Because of this, the agency is not able to file the same charges again. The filing also included several related companies and family members.
Related Reading: SEC, CFTC Sign New Pact to Align Crypto Oversight
The SEC first sued Al-Naji in July 2024. The agency said he sold the BTCLT tokens without registering them as securities. According to the complaint, the sale put around $257M in the pockets of investors. Regulators also claimed that about US$7M was used for personal spending.
However, the SEC did later review the evidence again. Officials said the decision to dismiss the case depended on the facts of this situation. The move is not a change of the agency’s position in other cases, the agency added. This statement was mentioned in the official document at the court.
The SEC also cited its crypto task force as another reason for the decision. The task force was established in January 2025 with the purpose of studying digital asset rules. Instead of taking enforcement actions, the group is focused on writing clear regulations. Because of this shift, some cases are now being reconsidered.
DOJ Case Ended Earlier Before SEC Decision
Before the SEC dismissal, the Department of Justice terminated a related criminal case. In early 2025, prosecutors dropped wire fraud charges against Al-Naji. That case was related to the same investigation of a token sale. After the end of the criminal case, the civil case went on until this week.
Legal filings said Al-Naji will not pay the fines and penalties. The agreement settled the case without any settlement payments. This result came as a surprise to many people in the crypto industry. Large fundraising cases typically have penalties or restrictions attached.
The decision followed a reassessment of the evidence, officials said. Regulators also said new policy discussions had an effect. The SEC is currently working on rules for digital assets instead of just filing lawsuits. This change may have repercussions on future enforcement actions.
Part of Wider Shift in Crypto Enforcement
The firing is among a broader trend in recent months. Several crypto cases have been reduced, delayed or dropped. Reports indicate that regulators are reviewing past decisions made under other policies. Due to this, some of the investigations are ending without court trials.
Instead of enforcement actions, industry groups have requested clear rules. Many companies claim that they need guidance before they enter new projects. The crypto task force was created for the purpose of developing that guidance. Officials believe written rules may be a way to avoid future disputes.
In summary, the SEC decision shuts the case on crypto after nearly 2 years. The agency said that the dismissal applies only to this situation. However, the move shows that U.S. regulators are shifting the way they approach digital asset cases.
