SEC Accuses Crypto Investment Scheme of Raising $130 Million Through Fake Approval Claims
From the desk of Jim Eccleston at Eccleston Law
The SEC has charged two entities with operating a cryptocurrency investment scheme that raised more than $130 million from tens of thousands of retail investors. According to the agency, the entities used their own SEC filings and fabricated registration certificates to convince investors that the government had approved their operations. Investors lost more than $100 million, the SEC alleges.
The complaint, filed October 29 in the U.S. District Court for the Northern District of California, names BG Wealth Sharing Ltd. and DSJ Exchange Pty Ltd. Both entities incorporated in Colorado in 2025, although the SEC alleges individuals operating from abroad ran the scheme, according to AltsWire.
The entities used legitimate SEC filing systems to lend credibility to their claims. BG Wealth filed a Form ADV in August 2025, identifying itself as an exempt reporting adviser. DSJ Exchange filed a Form D in July 2025, announcing a $100 million offering of pooled investment fund interests under Rule 506(c) and claiming more than $100 million in revenue.
The SEC alleges the entities presented those filings alongside fabricated registration certificates bearing the agency's seal. The certificates purported to show that the SEC had licensed or approved the entities. They also displayed the actual Central Registration Depository and Central Index Key numbers associated with the filings, allowing investors to locate the documents through the SEC's Investment Adviser Public Disclosure website and EDGAR.
However, neither filing established SEC approval, according to AltsWire. The SEC does not issue registration certificates, and neither a Form D nor an exempt reporting adviser's Form ADV serves as a license or endorsement. Neither entity registered with the SEC, and the agency alleges that the filings themselves contained false information.
The complaint identifies several warning signs, as reported by AltsWire. BG Wealth's Form ADV claimed that an independent accounting firm called Indicator Global audited its private funds. The firm does not appear in any public registry of accounting firms and appears to have filed its own Form ADV as an exempt reporting adviser. BG Wealth also listed a virtual mailbox as its principal office, provided a disconnected telephone number, and used addresses that returned undeliverable mail. DSJ Exchange submitted an EDGAR access application with a notary stamp from someone who, according to the complaint, never notarized the document.
The entities then promoted extraordinary returns. From October 2025 through June 2026, BG Wealth marketed itself as the world's largest hedge fund and promised investors returns of at least 60% per month. The complaint alleges that BG Wealth told investors they could double their principal in 40 days.
Investors deposited cryptocurrency through DSJ Exchange's platform and followed trading signals that BG Wealth distributed twice daily. The company claimed artificial intelligence generated the signals, which its purported founder, "Professor" Stephen Beard, shared with investors. The SEC alleges Beard was an assumed identity.
The SEC further alleges that the defendants never used investor assets for the promised trading. Instead, DSJ Exchange displayed fabricated trades and rising account balances while the defendants moved cryptocurrency across blockchains and through intermediaries. As much as $25 million flowed back to wallets likely associated with investors in what the SEC characterized as Ponzi-like payments.
AltsWire reports that the scheme relied heavily on multilevel marketing. Investors earned rewards for recruiting new participants, while the defendants used social media, weekly Zoom calls, and U.S. roadshows in Las Vegas, Hawaii, and Salt Lake City to attract more investors. One promoter in Concord, California, reached the program's seventh level and had approximately 5,000 downstream investors.
Between March and early June 2026, the defendants received more than $130 million from over 223,000 blockchain addresses, according to the complaint. Regulatory warnings followed. At least seven foreign regulators warned about BG Wealth and DSJ Exchange beginning in May 2025. Starting in March 2026, authorities in Alaska, Hawaii, Oklahoma, Texas, Utah, Washington, and Wisconsin also issued warnings and cease-and-desist orders.
The SEC charges both entities with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It also charges BG Wealth with violating Sections 204(a) and 207 of the Investment Advisers Act of 1940 by making false statements in its Form ADV and failing to produce records.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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