SEC Charges Two Firms in $130 Million Crypto Fraud Built on Fake Filings

The Securities and Exchange Commission charged two foreign-operated, Colorado-incorporated companies on Thursday with running a crypto investment fraud that raised more than $130 million from tens of thousands of retail investors. The complaint, filed in the U.S. District Court for the Northern District of California, names BG Wealth Sharing Ltd. and DSJ Exchange Pty Ltd. as defendants.

The scheme ran from at least October 2025 through June 2026, according to the filing. It reached investors in more than 40 states and several U.S. territories. The pitch was simple. Join a "wealth-sharing program," follow proprietary "signals" for crypto asset trading, and collect risk-free returns.

The SEC says the returns never existed.

What made the scheme look legitimate?

This is the part that should worry compliance desks. The companies didn't just talk a good game. They filed paperwork with the regulator itself.

The complaint alleges BG Wealth and DSJ Exchange submitted false Form ADV and Form D filings to the SEC. Those filings appeared on the agency's public website. Salespeople then shared them with investors as proof that the SEC had licensed or approved the firms.

BG Wealth also claimed to be the world's largest hedge fund, claimed SEC registration as an investment adviser, and said it partnered with a licensed, secure crypto trading platform in DSJ Exchange. None of it was true, according to the SEC. The filings have since been removed from the agency's website.

How the operation worked

Laura D'Allaird, chief of the SEC Enforcement Division's Cyber and Emerging Technologies Unit, said: "This alleged scheme was well-planned." She pointed to social media, encrypted messaging channels, weekly live videoconferences and a mobile app as the machinery that kept investors engaged.

The complaint describes fake certificates bearing the SEC's seal, displayed to participants. It also alleges the companies made periodic payments to some investors — a pattern D'Allaird called "a Ponzi-like tactic" — while misappropriating the remaining funds.

What does the SEC want from the court?

The agency charged both companies with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It charged BG Wealth separately under Sections 204(a) and 207 of the Investment Advisers Act of 1940, the provisions governing adviser filings and false statements to the regulator.

The remedies sought are standard for enforcement cases of this scale, but broad:

• Permanent injunctions against both companies
• Disgorgement with prejudgment interest
• Civil penalties
• Conduct-based injunctions against BG Wealth specifically

A wider warning on exempt filings

Beyond the courtroom, the SEC's Office of Investor Education and Assistance has issued alerts warning that scammers are using exempt reporting adviser filings to manufacture legitimacy. The filings, which carry far lighter disclosure obligations than full registration, can create a false impression of regulatory blessing when they surface in public databases. The agency is directing investors to verify anyone selling a crypto investment through Investor.gov.

The case also drew multi-jurisdiction support. The SEC credited the Alberta Securities Commission, the Hawaii Department of Commerce and Consumer Affairs, the Texas State Securities Board, the Utah Division of Securities, the Washington State Department of Financial Institutions and the Wisconsin Department of Financial Institutions, along with other authorities.

The litigation now moves into the Northern District of California, where the court will weigh the injunctions and monetary relief the SEC has requested — and where the fate of the roughly $130 million at the center of the case will be decided.