The U.S. Securities and Exchange Commission (SEC) has dropped its two-year case against Nader Al-Naji, founder of the blockchain-based social media platform BitClout.

 

The stipulation of dismissal was filed in the U.S. District Court for the Southern District of New York, and, according to the US regulator, the dismissal was based on a reassessment of evidentiary records.

 

 

Since the dismissal was issued with prejudice, the SEC will not be able to file the same charges against Al-Naji or any of the relief defendants named in the case, including his wife, mother, or any companies associated with him.

 

However, the SEC cautioned against treating the dismissal as a precedent for other cases. “The Commission’s decision to exercise its discretion and seek dismissal of this litigation is based on the particular facts and circumstances of this case and does not necessarily reflect its position on any other case,” it said.

 

Reacting to the dismissal, Nader Al-Naji, founder of BitClout, described the initial lawsuit as unreasonable. “In the coming days and weeks, I will be hopping on some podcasts to tell the whole story,” Al-Naji said.

 

 

Why the Sec Filed a Lawsuit Against Al-Naji

On July 30, 2024, the U.S. Securities and Exchange Commission (SEC) filed a civil lawsuit against Al-Naji. The regulator alleged multiple complaints against him, including offering unregistered securities. According to the SEC, Al-Naji failed to register BTCLT, BitClout’s native token, which he sold to investors, raising over $257 million from its sales.

 

The SEC also accused Al-Naji of fraud and misrepresenting the use of investor funds, claiming he spent more than $7 million on luxury properties in Beverly Hills and extravagant cash gifts for family members.

 

In addition to the SEC’s civil case, the U.S. Department of Justice (DOJ) alleged that Al-Naji committed wire fraud by misleading investors about the use of their funds, leading to his arrest in July 2024. However, these criminal charges were later dropped.

 

 

An Increase in the Number of Case Dismissals by the SEC

The dismissal of the BitClout case is one of several recent SEC case dismissals, particularly since the start of the Trump administration.

 

In January 2026, the SEC jointly dismissed its lawsuit against Gemini Trust Company and Gemini Earn. The regulator had initially alleged that Gemini Earn offered unregistered securities but dropped the charges without imposing penalties.

 

In 2025, the SEC voluntarily dismissed its case against the blockchain platform Dragoncoin, which it had accused of making misrepresentations. The case was closed with prejudice, and no penalties were imposed.