The US Securities and Exchange Commission (SEC) has removed regulatory filings allegedly used to legitimize a $130 million crypto investment fraud.
In an Oct. 29 announcement, the regulator said BG Wealth Sharing and DSJ Exchange submitted false disclosures to its public databases and subsequently presented those records to prospective investors as evidence of government authorization.
The scheme allegedly raised more than $130 million from tens of thousands of investors across the United States and abroad, resulting in losses exceeding $100 million.
According to the SEC, the companies operated between at least October 2025 and June 2026, promoting a cryptocurrency investment program that promised monthly returns of at least 60% and claimed investors could double their money within 40 days without risk.
BG Wealth portrayed itself as the world’s largest hedge fund and an SEC-licensed investment adviser, while DSJ Exchange claimed to run a secure cryptocurrency trading platform that executed profitable trades.
However, investigators alleged that the promised trading activity was fictitious and the companies diverted most investor deposits rather than investing them as advertised.
How the firms exploited the SEC’s own filing system
The alleged fraud relied heavily on the credibility of the SEC’s public disclosure infrastructure, which allows investors to research financial businesses and securities offerings.
According to the SEC’s civil complaint, BG Wealth submitted a Form ADV claiming exempt reporting adviser status, while DSJ Exchange filed a Form D announcing a purported $100 million securities offering.
The filings became publicly accessible through the SEC’s Investment Adviser Public Disclosure system and EDGAR database, allowing the promoters to direct prospective investors to government-hosted records as supposed proof of legitimacy.
The companies allegedly reinforced those claims with fabricated registration certificates bearing the SEC’s official seal and identifiers associated with their filings.
Neither company was registered with or licensed by the SEC, and submitting those forms did not constitute regulatory approval.
The deception extended beyond regulatory credentials.
BG Wealth claimed its proprietary trading technology generated signals with 99.6% accuracy, while DSJ Exchange displayed fictitious trades, profits, and growing account balances.
Investigators found that the defendants received more than $130 million from over 223,000 blockchain addresses between March and early June 2026.
The SEC alleges that no more than $25 million was returned to addresses likely belonging to investors through Ponzi-like payments, while the remaining funds were largely misappropriated.
The operation also employed social media campaigns, encrypted messaging platforms, weekly video conferences, and recruitment incentives to attract new participants.
When investors tried to withdraw their funds, the companies allegedly imposed fees of up to 20% and delayed withdrawals before eventually blocking access altogether.
The defendants subsequently demanded additional tax payments and encouraged investors to move their assets to another platform, HQI Exchange, without restoring withdrawal access.
The SEC has now removed BG Wealth’s Form ADV and DSJ Exchange’s Form D from its public websites.
The regulator also filed a civil lawsuit in the Northern District of California seeking permanent injunctions, financial penalties and the repayment of allegedly unlawful gains with interest.
It additionally asked the court to prohibit BG Wealth from submitting future Form ADV filings as an exempt reporting adviser.