The SEC has removed two sets of filings that two crypto firms allegedly used to make a $130 million investment scheme look government-approved. The regulator has also sued both firms, but recovery of the alleged investor losses remains unresolved.
The US Securities and Exchange Commission 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. They then 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 in the United States and abroad, with losses exceeding $100 million.
How the firms used the SEC's filing system
According to the SEC, the companies operated between at least October 2025 and June 2026. They 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.
The SEC's complaint says 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. Promoters then directed prospective investors to those records as supposed proof of legitimacy. Neither company was registered with or licensed by the SEC.
Fictitious trades and blocked withdrawals
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.
BG Wealth claimed its trading technology generated signals with 99.6% accuracy, while DSJ Exchange displayed fictitious trades, profits and growing account balances. When investors tried to withdraw, the companies allegedly imposed fees of up to 20% and delayed withdrawals before blocking access altogether.
SEC pulls the filings and sues
The SEC has now removed BG Wealth's Form ADV and DSJ Exchange's Form D from its public websites. It also filed a civil lawsuit in the Northern District of California seeking permanent injunctions, financial penalties and repayment of allegedly unlawful gains with interest.
The regulator additionally asked the court to bar BG Wealth from filing future Form ADV documents as an exempt reporting adviser.
Source: CryptoSlate
Trading involves risk.
Risk Disclaimer
