In the volatile landscape of cryptocurrencies, one name that recently made headlines is Decentralized Social, or DESO. This crypto asset experienced a dramatic drop, losing over 50% of its value in just a few hours. The reason? Its founder, Nader Al-Naji, was charged with fraud.
The Fraud Charges Against the DESO Founder The Value to Crash By Over 50%
Nader Al-Naji, the founder of the BitClout blockchain protocol, now known as Decentralized Social (DeSo), was charged by the Securities and Exchange Commission (SEC) for perpetrating a multi-million-dollar fraudulent crypto asset scheme. The SEC’s complaint alleges that Al-Naji raised more than $257 million from unregistered offers and sales of BTCLT, the native token of a social media platform called BitClout.
He falsely told investors that the proceeds would not be used to compensate him or other BitClout employees. In reality, Al-Naji allegedly spent more than $7 million of investor funds on personal expenditures like rental payments for a Beverly Hills mansion and extravagant cash gifts to family members.
To avoid regulatory scrutiny, Al-Naji portrayed BitClout as a decentralized project with “no company behind it … just coins and code,” and launched the project using the pseudonym “Diamondhands”. This was done to create the illusion that the project was autonomous when he was actually behind it.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Al-Naji with violating the registration and anti-fraud provisions of the Securities Act of 1933 and the anti-fraud provisions of the Securities Exchange Act of 1934.
Could DESO Get Delisted?
The charges against Al-Naji have undoubtedly cast a shadow over the future of DESO. The immediate impact was a drastic drop in the value of the cryptocurrency. Many investors, fearing further losses, decided to cut their losses and sell their holdings. This mass sell-off contributed to the sharp decline in DESO’s value.
There are concerns that the next step could be the delisting of DESO from major platforms like Coinbase. If this happens, it would significantly limit the avenues for buying and selling DESO, further impacting its value. However, it’s important to note that no official announcements have been made about delisting DESO from any platforms.
Can DESO Rebound After It’s 50% Crash?
Despite the current turmoil, some believe there is a chance for DESO to rebound. Cryptocurrencies are known for their volatility, and it’s not uncommon for a crypto asset to experience significant fluctuations in value. Those who buy DESO at its current low price could potentially make a fortune if the cryptocurrency rebounds.
However, this is a high-risk strategy. The future of DESO is uncertain, and its value could continue to decline. It’s also possible that the legal issues surrounding its founder could lead to further complications for the cryptocurrency.
The story of DESO serves as a reminder of the risks and rewards of investing in cryptocurrencies. While the potential for high returns is alluring, the volatility and regulatory uncertainties associated with these digital assets can lead to significant losses. As always, it’s crucial for investors to do their research and understand the risks before diving into the world of cryptocurrencies.
The future of DESO remains uncertain, but one thing is clear: the events of the past few days will have a lasting impact on the cryptocurrency and its investors. As always do your own research before investing in any cryptocurrency.
