Texas State Securities Board Halts Alleged Crypto Pyramid Scheme Targeting Texas Investors

AUSTIN, TEXAS - The Texas State Securities Board ("TSSB") has entered an Emergency Cease and Desist Order against BG Wealth Sharing LTD and its affiliated cryptocurrency trading platform, DSJ Exchange, to stop an alleged cryptocurrency investment and multi-level marketing scheme that targeted Texas investors with promises of extraordinary returns and little or no risk.

According to the order, BG Wealth Sharing LTD, DSJ Exchange, and BG Wealth Sharing Group, LLC, and two Texas Promoters (Gagan Sarkaria and Thaddious Thomas) have been soliciting unregistered securities to the public by promising exorbitant, "zero-risk" returns through algorithmic cryptocurrency trading signals. Recruiters allegedly lured investors with claims that a small initial deposit could generate "lifetime monthly income" and turn participants into millionaires within months through aggressive recruitment bonuses.

The enforcement action reveals that the operations exhibit classic hallmarks of an advance-fee multilevel marketing cryptocurrency scam. While the DSJ Exchange platform displayed fraudulent user dashboards showing substantial profits that allegedly did not reflect actual account values, that investors were unable to withdraw their investments.

"Bad actors often attempt to create a false sense of legitimacy by claiming government approval, regulatory registration, or official oversight," said Texas Deputy Securities Commissioner Cristi Ramón Ochoa. "We continue to see an increase in these MLM type of schemes. Investors should be extremely cautious when confronted with promises of unusually high returns, particularly when those returns depend on recruiting others into the program."

The order detailed several fraudulent tactics used by the respondents to mislead Texas residents:

• False Claims of Government Approval: The promoters falsely claimed that both BG Wealth Sharing and DSJ Exchange were fully licensed and vetted by the Securities and Exchange Commission (SEC).
• Withdrawal Restrictions and Advance Fees: After disabling standard account withdrawals, the operators demanded that victims pay an additional 12% "exit tax" or "compliance fee" out of pocket before any funds could be released.
• Recruitment-Based Compensation Structure: The scheme relied on encouraging existing participants to recruit friends, family members, and other investors in exchange for compensation and additional benefits. BG Wealth Sharing would pay bonuses and offer additional trading signals to investors recruiting new investors.
• Platform Migration and Additional Fees: After several other states issued similar orders BG Wealth Sharing issued guidance that this was based on DSJ Exchange's fraud, and investors needed to pay the new HQI Exchange $100 fee to migrate their account to the new platform.

The Texas State Securities Board encourages Texans to remain vigilant and to carefully evaluate investment opportunities before committing to the investment. Before investing, Texans should independently verify registration claims and research investment professionals through the Texas State Securities Board and the U.S. Securities and Exchange Commission. Investors should be skeptical of promises of guaranteed profits, little or no risk, or opportunities that require recruiting friends and family members.

Texas joins other state securities regulators that have taken action involving BG Wealth Sharing and affiliated entities in connection with similar allegations.

Justin Bontrager, an attorney in the Enforcement Division, is leading the investigation into BG Wealth Sharing.
Texans who have been solicited by or invested with BG Wealth Sharing LTD, DSJ Exchange, or any related entity are urged to contact the TSSB Enforcement Division via Contact Us | Texas State Securities Board, by calling (512) 305-8300, or by emailing [email protected].