How the DOJ and SEC Cases Against BitClout's Nader Al-Naji Collapsed

**Laura Shin** (0:02)
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Today's guest is Nader Al-Naji, founder of the DESO blockchain. Welcome, Nader.

**Nader Al-Naji** (1:23)
Hi. Thanks for having me, Laura.

**Laura Shin** (1:26)
Yeah. Excited to chat with you. You founded BitCloud and the DESO blockchain. Before that, Basis, which was, I think maybe the first algorithmic stablecoin.
But at this point, you might be more known for something that you didn't do, or at least something that the government said you did, but then didn't have enough evidence to actually follow through on the cases with. Even though we will get to that in our discussion, at this point in time, just so people know, the cases that the SEC and the Department of Justice brought against Nader have been dismissed. But in order to explain how we even got to this situation where all of this happened, we should probably start with Nader's backstory. So Nader, you have actually kind of a long history in crypto, so why don't you tell us that origin story? Take us through your early days in crypto.

**Nader Al-Naji** (2:21)
Yeah, thanks so much, Laura. Yeah, I love it. Yeah, maybe actually I'll just mention that currently I work on a blockchain called DESO, which your listeners might not know about, which is the source of all of this, like to set up the context a little bit. And that block, it's short for decentralized social, and you can basically think of it as like Twitter or X, but on a blockchain. And what that means is that like when you make a post, it's actually stored on a fully decentralized blockchain and like nobody can censor it, which is really cool. So like just like nobody can take your Bitcoin, nobody can censor your content. Like it's literally like Bitcoin for social media. And yeah, and so that's what I'm working on today currently. And I just also want to mention that like the blockchain is called DESO, but it used to be called BitClout. And so I'll sometimes switch between DESO and BitClout.
And yeah, and I'm sure we'll get to talk about it a lot, but just quickly on my background. So like I studied computer science at Princeton. I graduated in 2013
I worked full-time at a hedge fund called DESHA. I worked on their high-frequency equities team for a year. Actually I interned there and worked there full-time. And then I worked at Google for three years as an engineer. I worked in ads and search. And then in 2017, I started my first crypto company called Basis, as you mentioned, Laura. And this is before BitClout, but it's a fun story. I'll just tell it quickly, which is that Basis basically pioneered the concept of an algorithmic stablecoin. So Laura, I think your listeners know a stablecoin is basically a crypto dollar. It's a dollar you can use on Ethereum or any blockchain. And today, the winning stablecoins are Tether and USDC. And they're backed by dollars and a bank account. But Basis was trying to do a different approach. They call it the algorithmic approach, where the stablecoin stability actually comes from a supply adjustment algorithm that keeps the price stable. And I know that sounds crazy, like that like, oh, that like shouldn't work, but it absolutely can under the right conditions. So yeah, so for Basis, I raised over $140 million from Stan Druckenmiller, like Kevin Warsh, Andreessen, Bain, and a lot of other funds and people, basically to launch an alternative to Tether, but really long term to build what we call the algorithmic central bank, like a kind of a digital dollar that doesn't need dollars in a bank account to remain stable. And the original, the basic thesis was that Tether and bank-backed stablecoins in the short term were gonna be shut down actually. And that the only approach to stablecoins that would work even in the short term would be the algorithmic approach. And again, I know that sounds crazy because, you know, Tether and USDC are like so huge today. But in 2017, you might even remember Laura, you know, it really wasn't clear at the time that, you know, you could put dollars in the bank account and issue like a crypto dollar on top of it, you know. It was hard to even like get a bank account as a crypto company, let alone to put like billions of dollars and then make like a no KYC coin on top of it, you know.