The U.S. Securities and Exchange Commission on Thursday filed a complaint in federal court in Northern California accusing two Colorado‑incorporated entities, BG Wealth Sharing and DSJ Exchange, of running a $130 million crypto investment scheme that masqueraded as SEC‑registered. According to the SEC, the firms leveraged filings in the agency’s own public databases and forged registration certificates bearing the SEC seal to convince tens of thousands of retail investors that their trading program had official approval.

How the Scheme Operated

Between March and mid‑June 2026, the alleged fraud attracted deposits from more than 223,000 blockchain addresses, averaging roughly $580 per address, as calculated by Unchained. The SEC says the total investor losses top $100 million, with only about $25 million returned to wallets likely tied to investors, suggesting a Ponzi‑like payout structure. BG Wealth filed a Form ADV as an exempt reporting adviser in August 2025, while DSJ Exchange filed a Form D announcing a purported $100 million offering. The firms instructed investors to verify their legitimacy by locating these filings on the SEC’s adviser search site and EDGAR, presenting fabricated certificates that displayed the filings’ CRD and CIK numbers as proof of registration.

False Filings and Deceptive Tactics

The complaint notes that the filings were misleading: BG Wealth listed an auditor, Indicator Global, that does not appear in any public accounting registry, and used a virtual mailbox as its principal office. After the FBI seized BG Wealth’s original domain on April 23, the company’s purported founder, Stephen Beard, blamed a Chinese hacker, according to the SEC. DSJ Exchange later halted withdrawals and demanded a “tax” to unlock accounts, urging investors to deposit additional funds to migrate to a new platform called HQIEX. Those who complied still could not withdraw their money. On September 29, DSJ Exchange rebranded as Horizon Crest Capital on EDGAR and submitted a new Form D.

Regulatory Response and Potential Penalties

The SEC alleges violations of federal antifraud rules by both firms and cites an additional breach of the Investment Advisers Act by BG Wealth. The agency is seeking injunctions, disgorgement of ill‑gotten profits, civil penalties, and an order barring BG Wealth from filing further Form ADV documents as an exempt reporting adviser. At least seven foreign regulators and seven U.S. states have already issued warnings or enforcement actions related to the scheme.

What to Watch Next

Investors should monitor forthcoming court filings for details on the SEC’s requested penalties and any restitution plans for victims. Regulators may also issue further guidance on how firms can responsibly reference SEC filings in marketing materials to prevent similar abuses. The case underscores heightened scrutiny of crypto investment platforms that claim regulatory endorsement without proper licensing.