The US Securities and Exchange Commission filed a joint stipulation on Thursday to dismiss with prejudice its civil enforcement action against DeSo founder Nader Al-Naji and six related relief defendants in the Southern District of New York.
The dismissal means the SEC cannot refile the same claims against these defendants. But the Commission moved to limit any broader reading of the move.
“[The dismissal] does not necessarily reflect the Commission’s position on any other case,” the joint stipulation stated, adding that the decision was based on the “particular facts and circumstances” involved.
Original allegations
The case dates to July 2024, when the SEC accused Al-Naji of raising more than $257 million through unregistered sales of BTCLT, the native token of his blockchain-based social media platform BitClout, later rebranded as DeSo.
The SEC’s complaint alleged Al-Naji misled investors by portraying BitClout as having “no company behind it … just coins and code” and by operating under the pseudonym “Diamondhands” to create the appearance of a leaderless project. The regulator also alleged roughly $7 million in investor funds was diverted to personal spending, including rent on a Beverly Hills mansion and cash gifts to family members.
The relief defendants named alongside Al-Naji were his wife Buse Desticioğlu Al-Naji, his mother Joumana Bahouth Al-Naji, and three entities he controlled, Intangible Holdings, Firestorm Media, and Viridian City, as well as the DeSo Foundation.
When the SEC filed its civil complaint in 2024, the US Attorney’s Office for the Southern District of New York announced parallel criminal charges against Al-Naji. Thursday’s SEC filing does not address the status of those separate proceedings.
The civil case, filed on July 30, 2024, and assigned case number 1:24-cv-05738, ran for roughly 20 months before the joint dismissal was entered.
