According to the criminal charges, Al-Naji misled investors, including by taking $3 million from an investor and using it for his own personal expenses and gifts to family. Al-Naji had told investors that the sales of the platform's token would not go to him or to other employees.
The SEC complaint separately alleged that Al-Naji had tried to falsely present the BitClout project as decentralized, including by soliciting a letter of opinion from a law firm that his tokens were not likely to be deemed securities, which was based on mischaracterizations.
BitClout raised money from various prominent firms, including Andreessen Horowitz, Sequoia, Chamath Palihapitiya's Social Capital, Coinbase Ventures and Winklevoss Capital.