SEC Removes Filings and Sues Two Crypto Firms Over Alleged $130 Million Fraud
SEC Sues Two Crypto Firms Over Alleged Fraud
The U.S. Securities and Exchange Commission has removed public filings from two crypto firms and sued them, alleging the companies used the SEC's own filing system to promote an investment fraud. The SEC announced the action on Oct. 29.
The regulator says BG Wealth Sharing and DSJ Exchange showed government-hosted records to investors as evidence that the SEC had authorized their operations.
Key Details From the Case
- The firms allegedly raised more than $130 million from over 223,000 blockchain addresses, which are digital identifiers used to send and receive funds on a blockchain network, between March and early June 2026.
- Investor losses exceeded $100 million.
- They promised monthly returns of at least 60% and claimed investors could double their money within 40 days without risk.
- Neither company was registered with or licensed by the SEC.
- The SEC filed a civil lawsuit in the Northern District of California.
What the SEC Announcement Says
According to the SEC, BG Wealth Sharing submitted a Form ADV, a form used by investment advisers, claiming exempt reporting adviser status. DSJ Exchange filed a Form D, a notice for securities offerings, announcing a purported $100 million offering.
The filings became public through the SEC's Investment Adviser Public Disclosure system and EDGAR database. The companies reportedly directed investors to those government-hosted records as supposed proof of legitimacy. The SEC states that submitting the forms did not constitute regulatory approval.
The firms also allegedly used fabricated registration certificates bearing the SEC's official seal. BG Wealth described itself as the world's largest hedge fund and an SEC-licensed investment adviser. DSJ Exchange claimed to operate a secure cryptocurrency trading platform, which is an online marketplace where people buy and sell cryptocurrency.
Confirmed Facts
- The SEC removed BG Wealth's Form ADV and DSJ Exchange's Form D from its public websites.
- The regulator sued both firms seeking permanent injunctions, financial penalties, and repayment of allegedly unlawful gains with interest.
- The SEC asked the court to prohibit BG Wealth from submitting future Form ADV filings as an exempt reporting adviser.
What Remains Unclear
Recovering the more than $100 million in alleged investor losses remains unresolved. The source does not say when or if investors will be repaid.
Why This Matters for Investors
Some investors check SEC websites to confirm whether a firm is registered. This case shows that a public filing does not mean the SEC has approved a company or its investment promises.
What Happens Next in the Case
The civil lawsuit will proceed in the Northern District of California. The court will decide on the SEC's requests for injunctions, penalties, and repayment.
Source
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.