Texas regulators targeted a purported crypto investment and MLM scheme that promised millionaire status, passive income and high monthly returns through recruiting and trading codes. The order also cites withdrawal fees, investor blocks and allegations of AI-assisted low-risk trading.
Key points to remember:
- Recruiters allegedly promised investors that they could become millionaires in a matter of months through aggressive sponsorship incentives.
- Regulators cited claims of 60% monthly returns, capital protection and a 99.6% trading success rate.
- Investors faced withdrawal hurdles, including a 20% processing fee and 12% subsequent fees related to taxes and account transfers.
Texas Order Reports Crypto Returns, Investor Recruitment and Blocks
The Texas State Securities Board said June 3 that it had issued an emergency cease and desist order against BG Wealth Sharing LTD and DSJ Exchange PTY Ltd. The order targets an alleged crypto investment and multi-level marketing (MLM) program aimed at Texas investors. Regulators have described DSJ as a purported crypto exchange linked to passive investments and AI-driven trading claims.
The order also names BG Wealth Sharing Group LLC, Thaddious Thomas and Gagandeep Sarkaria. Regulators reported that BG Wealth sent investors trading codes through Bonchat, a messaging app, and asked them to enter the codes on DSJ’s purported crypto exchange. The process gave investors little control over trades while making the platform appear active. It also rewarded recruitment, allowing participants to receive more trade codes by bringing others into the program.
The regulator said:
“Recruiters allegedly lured investors by claiming that a small initial deposit could generate ‘monthly income for life’ and turn participants into millionaires within months through aggressive recruitment bonuses.”
The program uses several pressure points to build investor confidence. Regulators cited claims of a 99.6% success rate, guaranteed capital protection, monthly returns of at least 60% and doubling of capital in around 40 days. These promises make the platform appear systematic and low-risk. The order says investors depended on expert systems, AI-based strategies and programmed trading codes.
Exit fees and state actions raise risk concerns for investors
The emergency cease and desist order states that investors wishing to make withdrawals will have to pay a processing fee of approximately 20% of the account value. Those interviewed framed the accusation as an anti-arbitrage and anti-money laundering measure. Texas also reported that BG Wealth subsequently demanded an additional 12% of each investor’s account value. This payment was related to taxes and account transfer fees.
The regulator noted:
“After disabling standard account withdrawals, the operators required victims to pay an additional 12% “exit tax” or “compliance fee” out of their own pocket before funds could be released.
Texas joins Washington and Hawaii in taking formal action on state securities involving BG Wealth Sharing or affiliated entities. Utah and Alaska also issued investor warnings related to BG Wealth Sharing and DSJ Exchange, but these alerts did not constitute formal cease and desist orders. The broader response shows how the deal affected investors in multiple states.
The exit strategy created another risk for investors. After regulatory warnings, respondents blamed DSJ for the fraud allegations and directed investors to HQIEX, described in the order as a replacement exchange service. This change could keep victims engaged while adding uncertainty. It also diverted attention from withdrawals, missing information, custody of funds, trading activities and mixed concerns.
