Two Crypto Court Twists in New York: SEC Walks Away From Bitclout-Deso Case, Judge Rejects EminiFX RICO Claims

Translation for the non-lawyers: the case is finished, closed, and legally buried deep enough that the SEC cannot bring the same claims again.

The SEC’s latest filing said the agency reassessed the evidentiary record and the specific facts of the case before deciding to withdraw. Each side agreed to cover its own legal costs, and both Al-Naji and several associated relief defendants — including family members and entities tied to the project — waived potential reimbursement claims against the government.

Alexandre is already serving a nine-year federal prison sentence after pleading guilty in 2023 to commodities fraud for running the operation, which collected roughly $248 million from tens of thousands of investors between September 2021 and May 2022.

Instead, authorities say much of the money was lost or diverted, including millions that landed in Alexandre’s personal accounts and financed purchases such as a $155,000 BMW.

The newer civil lawsuit sought roughly $750 million in damages and attempted to pull church entities and leaders into the case under the federal Racketeer Influenced and Corrupt Organizations Act, arguing that their positions of authority helped promote the scheme to parishioners.

Judge Abrams ruled those RICO claims could not proceed because they were based on alleged securities fraud — something Congress explicitly carved out from civil RICO suits through the Private Securities Litigation Reform Act.

Without the RICO hook, the court lacked nationwide jurisdiction over the defendants, forcing the dismissal of the case as currently structured. Plaintiffs now have 30 days to attempt a revised complaint if they can construct a viable legal theory.