The US Securities and Exchange Commission (SEC) has charged two Colorado-incorporated entities with allegedly raising more than $130 million through a fraudulent crypto investment program that promised returns of at least 60% a month and misrepresented the firms as SEC-licensed.
The defendants, BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd, received more than $130 million in investor deposits from March through mid-June 2026, according to an SEC complaint filed on October 29 in the US District Court for the Northern District of California. The funds came from more than 223,000 blockchain addresses associated with investors in over 40 US states, multiple territories, and other countries.
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The SEC alleges that the firms fabricated crypto trading activity and account profits, misused public SEC filing systems to create an appearance of regulatory approval, and misappropriated most of the assets deposited by investors. The complaint seeks permanent injunctions, repayment of allegedly ill-gotten gains with prejudgment interest, and civil penalties. The allegations have not been tested in court.
The Crypto Times reached out to the firms for comment on the SEC’s action but has not received any response at the time of publication.
SEC alleges firms falsified trading returns and regulatory status
According to the complaint, BG Wealth promoted a so-called wealth-sharing program from at least October 2025 through June 2026, claiming that investors could earn returns through crypto trading signals generated by a proprietary artificial intelligence system.
The company allegedly described itself as the world’s largest hedge fund and claimed its trading signals had 99.6% accuracy. It promised investors monthly returns of at least 60%, said they could double their principal within 40 days, and described the program as risk-free.
BG Wealth directed participants to deposit crypto assets, including USDC, USDT and Ether, into accounts on DSJ Exchange’s website or mobile application. Investors were instructed to copy alphanumeric trading signals distributed through an encrypted messaging platform into their accounts.
The SEC alleges that DSJ Exchange did not execute the trades as represented. Instead, its platform displayed fabricated transactions, profits, and account balances, giving investors the impression that their deposits were generating returns. Neither company was registered with the SEC, the complaint states. The regulator also alleges that the firms did not use investor assets for the promised trading activity and that the program generated no trading profits.
False SEC filings used to reassure investors
The SEC said the firms used filings submitted to its public databases to support claims that they were licensed or approved by the regulator. BG Wealth filed a Form ADV as an exempt reporting adviser, while DSJ Exchange submitted a Form D notifying the SEC of a purported $100 million securities offering. The companies allegedly directed investors to these publicly accessible filings as evidence of their regulatory status.
However, the SEC said neither filing represented a license or approval from the regulator. It also alleged that the documents contained false information, including misleading business addresses and contact details. The complaint further alleges that the companies circulated fabricated registration certificates bearing the SEC’s seal. The regulator said it does not issue such certificates.
The Form ADV filed by BG Wealth and the Form D submitted by DSJ Exchange have since been removed from the SEC’s website, according to the agency’s announcement.
SEC says most investor funds were misappropriated
Rather than using the deposited crypto assets for trading, the defendants allegedly transferred investor funds across blockchains and through intermediaries. The SEC estimates that no more than $25 million flowed back to wallet addresses likely associated with investors through payments that it characterized as Ponzi-like. These payments allegedly helped maintain confidence in the program and encourage further deposits.
The complaint says BG Wealth also relied on a multilevel marketing structure to expand its investor base. Participants were encouraged to recruit new members and build teams in exchange for additional trading signals, bonuses, commissions, and transaction-volume dividends.
The firms allegedly used social media, encrypted messaging channels, weekly Zoom meetings, and in-person promotional events across several US cities to attract investors. The SEC said the program reached participants in more than 40 states and multiple US territories. Investors were initially allowed to make some withdrawals, but the companies allegedly imposed fees of up to 20% and delays. The complaint states that DSJ Exchange eventually blocked withdrawals altogether.
After the FBI seized one of BG Wealth’s main website domains in April 2026, the SEC alleges that the scheme’s promoters blamed a purported Chinese hack. Investors were later directed to transfer funds to a replacement platform called HQI Exchange, or HQIEX, and some were asked to make additional payments described as taxes to unlock their accounts. The complaint alleges that investors who made those payments still could not withdraw their assets.
SEC seeks injunctions and financial penalties
The SEC charged both companies with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It also accused BG Wealth of violating provisions of the Investment Advisers Act concerning recordkeeping and false statements in regulatory filings.
The regulator is seeking permanent injunctions against both defendants, disgorgement of allegedly ill-gotten gains with prejudgment interest, and civil monetary penalties. It is also seeking an order restricting BG Wealth from filing future Forms ADV as an exempt reporting adviser.
The SEC said its investigation received assistance from several state and provincial regulators, including the Alberta Securities Commission and securities authorities in Hawaii, Texas, Utah, Washington and Wisconsin.
The agency has separately warned investors that scammers may use exempt reporting adviser filings to create a false impression of SEC registration. It advises investors to check the background of investment providers through Investor.gov.
Other crypto fraud cases draw enforcement attention
The SEC’s action comes amid other enforcement cases involving alleged cryptocurrency investment fraud and theft.
In Canada, Aiden Pleterski, who called himself the “Crypto King,” was found guilty of fraud over C$5,000 following a jury trial in Toronto, CBC News reported on October 29. Prosecutors told the court that Pleterski collected more than $36 million from investors but did not trade the funds as promised. Financial records presented at trial showed about $16.3 million in personal spending and $16.1 million paid to investors as purported returns.
Separately, the US Department of Justice charged six people over an alleged NFT investment scam operating from Madagascar. Investigators identified about 74 cryptocurrency wallets linked to roughly 800 victims, according to the DOJ. The agency also reported broader enforcement results from its Scam Center Strike Force, including more than $1 billion in restrained cryptocurrency and 700 seized fraudulent investment websites. Those figures relate to the task force’s wider investigations, not solely the Madagascar case.
In another case, a federal court in Miami sentenced Canadian national Trenton Richard David Johnston to 25 months in prison after he pleaded guilty to conspiracy to commit money laundering. Court records say Johnston and co-conspirators impersonated technology and cryptocurrency support staff to obtain wallet access codes and steal digital assets. Johnston surrendered about $3.8 million in Bitcoin and Ether.
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