AUSTIN, Texas - Texas securities regulators have issued an emergency enforcement order against a cryptocurrency investment operation accused of targeting Texans with promises of extraordinary returns and little to no risk.
The Texas State Securities Board (TSSB) announced it has entered an Emergency Cease and Desist Order against BG Wealth Sharing LTD and its affiliated cryptocurrency trading platform, DSJ Exchange, alleging the companies operated an unregistered investment scheme that relied heavily on multi-level marketing recruitment tactics.
According to the order, BG Wealth Sharing LTD, DSJ Exchange, BG Wealth Sharing Group LLC, and Texas promoters Gagan Sarkaria and Thaddious Thomas allegedly solicited investors by promoting unregistered securities tied to algorithmic cryptocurrency trading signals.
Regulators allege investors were promised exceptionally high returns and "zero-risk" investment opportunities. Recruiters reportedly claimed that small deposits could generate lifetime monthly income and potentially turn participants into millionaires within months through recruitment-based bonuses.
The enforcement action alleges the operation displayed several characteristics commonly associated with advance-fee cryptocurrency and multi-level marketing scams.
According to the TSSB, the DSJ Exchange platform allegedly displayed user dashboards showing significant profits that did not reflect actual account values. Regulators also allege investors were unable to withdraw their funds.
Texas Deputy Securities Commissioner Cristi Ramón Ochoa warned that fraudulent investment schemes often attempt to appear legitimate by falsely claiming regulatory approval.
"Bad actors often attempt to create a false sense of legitimacy by claiming government approval, regulatory registration, or official oversight," Ochoa said. "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 outlines several alleged deceptive practices, including:
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False claims that BG Wealth Sharing and DSJ Exchange were licensed, approved, or vetted by the U.S. Securities and Exchange Commission.
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Restrictions on investor withdrawals coupled with demands for additional payments, including a 12% "exit tax" or "compliance fee" before funds could allegedly be released.
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Compensation structures that rewarded participants for recruiting new investors.
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Additional fees related to transferring accounts to a new platform called HQI Exchange after regulators in other states began taking enforcement actions.
State regulators said BG Wealth Sharing allegedly informed investors that issues stemmed from DSJ Exchange and encouraged users to pay a $100 fee to migrate accounts to the new platform.
The Texas State Securities Board is urging Texans to thoroughly research investment opportunities before committing money and to independently verify registration claims through state and federal regulators.
Officials also cautioned investors to be skeptical of any investment promising guaranteed profits, little or no risk, or rewards tied to recruiting friends and family members.
Texas joins several other states that have taken regulatory action involving BG Wealth Sharing and affiliated entities.
The investigation is being led by attorney Justin Bontrager of the Texas State Securities Board's Enforcement Division.
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 enforceinfo@ssb.texas.gov.
