The U.S. Securities and Exchange Commission has removed regulatory filings it says were used to deceive investors in an alleged $130 million cryptocurrency fraud scheme. The regulator alleges that BG Wealth Sharing and DSJ Exchange submitted false forms to its public databases and then presented them as evidence of government authorization. According to the SEC, the companies operated between at least October 2025 and June 2026. The scheme allegedly raised more than $130 million from tens of thousands of investors, leading to losses exceeding $100 million.
The alleged scam relied on the credibility of the SEC's Investment Adviser Public Disclosure system and EDGAR database, which allow investors to research financial firms. According to the SEC's civil complaint, BG Wealth filed 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, and the companies directed prospective investors to these government-hosted records as supposed proof of legitimacy. The companies allegedly reinforced those claims with fabricated registration certificates bearing the SEC's seal and filing identifiers.
Neither company was actually registered with or licensed by the SEC. Submitting the forms did not constitute regulatory approval. BG Wealth portrayed itself as the world's largest hedge fund and an SEC-licensed investment adviser, promising monthly returns of at least 60 percent and claiming investors could double their money within 40 days without risk. DSJ Exchange claimed to run a secure trading platform that executed profitable trades, with BG Wealth asserting its trading technology generated signals with 99.6 percent accuracy. However, investigators alleged that the promised trading activity was fictitious and that the companies diverted most investor deposits.
The SEC says 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. When investors tried to withdraw funds, the companies allegedly imposed fees of up to 20 percent and delayed withdrawals before eventually blocking access. They later demanded additional tax payments and encouraged investors to move assets to another platform without restoring withdrawal access.
The SEC filed a civil lawsuit in the Northern District of California seeking permanent injunctions, financial penalties, repayment of allegedly unlawful gains with interest, and a prohibition on BG Wealth from submitting future Form ADV filings as an exempt reporting adviser.
Analysis
Why This Matters
- The case reveals how scammers can exploit regulatory databases meant to protect investors, turning a verification tool into a lure.
- Tens of thousands of investors lost substantial sums, highlighting the need for skepticism even when a company appears in government records.
- The SEC's lawsuit could set a precedent for holding companies accountable for misusing public filing systems and may prompt changes to how filings are vetted.
Background
The SEC's public disclosure systems, including the Investment Adviser Public Disclosure (IAPD) database and EDGAR, allow investors to research financial firms and securities offerings. Companies are required to submit forms such as Form ADV (for investment advisers) and Form D (for securities offerings) to provide transparency. In this case, BG Wealth and DSJ Exchange filed false forms that became publicly accessible, which the scammers then used as credibility props without SEC approval or oversight.
What to Watch
- The progress of the SEC's civil suit in the Northern District of California and any court-ordered penalties or restitution.
- Whether the court grants the SEC's request to prohibit BG Wealth from submitting future Form ADV filings.
- Potential for the SEC to review its filing acceptance procedures in response to this misuse.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedThe SEC removed filings used in an alleged $130 million crypto fraud.CryptoSlate: “The US Securities and Exchange Commission (SEC) has removed regulatory filings allegedly used to legitimize a $130 million crypto investment fraud.”
- SupportedThe companies allegedly used the SEC’s public databases to lure investors by presenting records as proof of government authorization.CryptoSlate: “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.”
- SupportedThe companies promised monthly returns of at least 60%.CryptoSlate: “promoting a cryptocurrency investment program that promised monthly returns of at least 60%”
- SupportedAccording to the SEC, the companies operated between at least October 2025 and June 2026.CryptoSlate: “According to the SEC, the companies operated between at least October 2025 and June 2026”
- SupportedThe scheme allegedly raised more than $130 million from tens of thousands of investors and resulted in losses exceeding $100 million.CryptoSlate: “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.”
- SupportedBG Wealth filed a Form ADV claiming exempt reporting adviser status.CryptoSlate: “BG Wealth submitted a Form ADV claiming exempt reporting adviser status”
- SupportedDSJ Exchange filed a Form D announcing a purported $100 million securities offering.CryptoSlate: “DSJ Exchange filed a Form D announcing a purported $100 million securities offering.”
- SupportedNeither company was registered with or licensed by the SEC.CryptoSlate: “Neither company was registered with or licensed by the SEC”
- SupportedBG Wealth claimed investors could double their money within 40 days without risk.CryptoSlate: “claimed investors could double their money within 40 days without risk.”
- SupportedInvestigators alleged the promised trading activity was fictitious and the companies diverted most investor deposits.CryptoSlate: “However, investigators alleged that the promised trading activity was fictitious and the companies diverted most investor deposits rather than investing them as advertised.”
- Partly supportedThe SEC says the defendants received more than $130 million from over 223,000 blockchain addresses between March and early June 2026.CryptoSlate: “Investigators found that the defendants received more than $130 million from over 223,000 blockchain addresses between March and early June 2026.”
- SupportedThe SEC alleges that no more than $25 million was returned to addresses likely belonging to investors through Ponzi-like payments.CryptoSlate: “The SEC alleges that no more than $25 million was returned to addresses likely belonging to investors through Ponzi-like payments”
