SEC Charges Two Firms in $130 Million Crypto Scheme Built on False Filings
The U.S. Securities and Exchange Commission has charged two Colorado-incorporated entities with running a crypto investment scheme that raised more than $130 million from tens of thousands of retail investors, in part by pointing them to the entities’ own SEC filings as proof of government approval.
The complaint, filed Oct. 29 in U.S. District Court for the Northern District of California, names BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd. Both were formed in 2025 with Colorado addresses, but the SEC alleges the scheme was run by individuals located abroad. Investors lost more than $100 million, according to the complaint.
Real Filings, False Claims
BG Wealth filed a Form ADV with the SEC in August 2025 claiming to be 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 then presented those filings, together with fabricated registration certificates bearing the SEC seal, as evidence that the agency had licensed or approved them. The fake certificates carried the real Central Registration Depository and Central Index Key numbers assigned to the filings, allowing investors to look up the documents on the SEC’s Investment Adviser Public Disclosure site and EDGAR.
The SEC does not issue registration certificates, and neither a Form D nor an exempt reporting adviser’s Form ADV is a license or evidence of SEC approval, according to the complaint. Neither entity was registered with the agency.
The filings themselves were false, the SEC alleges. BG Wealth’s Form ADV said its private funds were audited by an independent accounting firm, Indicator Global, which does not appear in any public registry of accounting firms and appears to have filed its own Form ADV as an exempt reporting adviser. The listed principal office was a virtual mailbox, the phone number was disconnected, and mail to the listed addresses came back undeliverable. DSJ Exchange’s EDGAR access application carried a notary stamp from a notary who did not notarize it, according to the complaint.
On Sept. 29, DSJ Exchange changed its EDGAR name to Horizon Crest Capital Inc., which purports to be a New York corporation, and filed a new Form D in what the complaint calls an apparent attempt to perpetuate the fraud. The SEC has since removed BG Wealth’s Form ADV and DSJ Exchange’s Form D from its website.
‘Wealth-Sharing Program’
From October 2025 through June 2026, BG Wealth marketed itself as the world’s largest hedge fund and promised returns of at least 60% a month, telling investors they could double their principal in 40 days, according to the complaint. Investors deposited crypto assets on DSJ Exchange’s platform and copied trading signals, purportedly generated by artificial intelligence, that were distributed twice daily by BG Wealth’s purported founder, “Professor” Stephen Beard. The SEC alleges Beard is an assumed identity.
The SEC alleges investor assets were never used for the promised trading. DSJ Exchange displayed fabricated trades and growing balances while the defendants moved investor assets across blockchains and through intermediaries. As much as $25 million flowed back to wallets likely tied to investors in what the agency called Ponzi-like payments.
The scheme grew through multilevel marketing that rewarded investors for recruiting others, along with social media, weekly Zoom calls, and U.S. roadshows in Las Vegas, Lā’ie, Hawaii, and Salt Lake City. One promoter in Concord, Calif., reached the program’s seventh level with roughly 5,000 downstream investors. From March through early June 2026, the defendants received more than $130 million from more than 223,000 blockchain addresses, according to the complaint.
Regulatory Warnings
At least seven foreign regulators warned about BG Wealth and DSJ Exchange starting in May 2025, and authorities in Alaska, Hawaii, Oklahoma, Texas, Utah, Washington, and Wisconsin issued warnings and cease-and-desist orders beginning in March 2026, the SEC said. Authorities seized one of BG Wealth’s principal websites in April 2026, and BG Wealth falsely blamed a “Chinese hack,” according to the complaint.
DSJ Exchange later blocked withdrawals. Investors seeking their money were told to pay a “tax” to unlock accounts and to deposit more assets to move to a new platform, HQI Exchange. Those who paid still could not withdraw, the SEC alleges.
“They further sustained the ruse by displaying fake certificates with the SEC’s seal and making periodic payments to certain investors – a Ponzi-like tactic – while misappropriating the remaining funds,” said Laura D’Allaird, chief of the SEC Enforcement Division’s Cyber and Emerging Technologies Unit.
Charges
The SEC charges both entities with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and charges BG Wealth with violating Sections 204(a) and 207 of the Investment Advisers Act of 1940 for false statements in its Form ADV and failure to produce records. The agency seeks permanent injunctions, disgorgement with prejudgment interest on a joint and several basis, civil penalties, and an order barring BG Wealth and those acting with it from filing Forms ADV as an exempt reporting adviser.
The case is the latest in a run of SEC actions over allegedly false adviser filings. In August, the agency charged 38 entities with filing false exempt reporting adviser Forms ADV, some of which were promoted on websites displaying fake SEC registration certificates. AltsWire reported in November 2025 on similar charges against six purported advisers.
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