SEC uncovers $130M crypto fraud after removal of falsified filings

The U.S. Securities and Exchange Commission (SEC) has removed regulatory filings that were allegedly used to give a false appearance of legitimacy to a $130 million cryptocurrency investment fraud.

In an October 29 announcement, the regulator said BG Wealth Sharing and DSJ Exchange submitted false disclosures to its public databases and then presented those records to prospective investors as proof of official approval.

The scheme is alleged to have raised more than $130 million from tens of thousands of investors across the United States and abroad, causing losses exceeding $100 million.

According to the SEC, the firms operated from at least October 2025 through 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 with no risk.

BG Wealth represented itself as the world’s largest hedge fund and an SEC‑registered investment adviser, while DSJ Exchange claimed to operate a secure cryptocurrency trading platform that generated profitable trades.

Investigators allege, however, that the promised trading activity was fictitious and that the companies diverted most investor deposits instead of 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 enables investors to research financial firms 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 the 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 linked to their filings.

Neither company was registered with or licensed by the SEC, and the submission of those forms did not amount to regulatory approval.

The deception went 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 investor‑likely addresses 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 attempted to withdraw their funds, the companies allegedly imposed fees of up to 20% and delayed withdrawals before ultimately blocking access altogether.

The defendants then 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 also requested that the court bar BG Wealth from submitting future Form ADV filings as an exempt reporting adviser.

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