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Regulation & Policy · 1 min read

SEC Sues BG Wealth and DSJ Exchange Over $130 Million Crypto Scheme

Regulators allege the entities submitted fraudulent Form ADV and Form D filings to fabricate agency endorsement while marketing automated trading signals.

Editorial oversight: Julian Mercer, Chief Editor
Bearish

At a glance Enforcement action

What happened
The SEC charged BG Wealth Sharing and DSJ Exchange on Oct. 29 for orchestrating an alleged $130 million retail investment fraud.
Why it matters
The defendants allegedly abused public SEC filing portals to fabricate official registration and mislead retail participants.
Who is affected
Tens of thousands of retail investors across more than 40 U.S. states and multiple U.S. territories.
What's next
Proceedings will move forward in the U.S. District Court for the Northern District of California on injunctions and penalties.
Primary source
sec.gov: Two Entities Charged in $130 Million Fraud Scheme That Used False SEC Filings to Boost Investor Confidence

Key points

  • The SEC charged BG Wealth Sharing and DSJ Exchange for an alleged $130M fraud scheme targeting retail investors in over 40 U.S. states.
  • Defendants allegedly filed false Form ADV and Form D documents to falsely claim SEC registration and backing.
  • The SEC seeks permanent injunctions, disgorgement, and civil penalties in the Northern District of California.

The Securities and Exchange Commission charged two Colorado-incorporated, foreign-operated entities on Oct. 29 for operating an alleged $130 million fraudulent crypto trading scheme 1. According to the agency's complaint filed in the U.S. District Court for the Northern District of California, BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd targeted tens of thousands of retail investors across more than 40 U.S. states and several U.S. territories between at least October 2025 and June 2026 1.

The defendants allegedly promoted a "wealth-sharing program" that promised risk-free profits generated by automated artificial intelligence trading signals 1. Regulators stated that BG Wealth claimed to be the largest hedge fund in the world and asserted that it was registered as an investment adviser with the SEC, while framing DSJ Exchange as a licensed, secure trading venue 1. To legitimize the venture, the entities allegedly submitted deceptive Form ADV and Form D filings to the Commission's public database and presented fake certificates bearing the official SEC seal to retail participants 1. The case expands on broader regulatory efforts highlighted in previous reports where regulators claw back millions in crypto fraud and theft cases through federal court filings.

Ponzi Tactics and Fabricated Registrations

According to SEC Enforcement Division Cyber and Emerging Technologies Unit Chief Laura D’Allaird, the promoters sustained the operation through weekly live video meetings, mobile apps, social media, and encrypted chat channels 1. The SEC alleged that the operators made periodic distributions to select participants in a Ponzi-style structure while misappropriating the balance of the raised capital 1.

The Commission charged both firms with antifraud violations under the Securities Act of 1933 and the Securities Exchange Act of 1934, alongside Investment Advisers Act violations against BG Wealth 1. The regulator is seeking permanent injunctions, civil monetary penalties, and disgorgement of illicit profits with prejudgment interest 1. Following the enforcement action, the SEC purged the entities' Form ADV and Form D submissions from its public website and issued an investor alert regarding bad actors weaponizing exempt reporting filings to fabricate regulatory approval 1.

Sources

  1. [1] Two Entities Charged in $130 Million Fraud Scheme That Used False SEC Filings to Boost Investor Confidence — sec.gov, October 29, 2026

Written by Basis Desk's newsroom system from the primary sources above and machine-verified against them before publication. Market figures marked "at the time of writing" come from live exchange data. Report an error: corrections@basisdesk.news · corrections policy.

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