Texas Targets BG Wealth’s Crypto MLM After 60% Return Promises

The Texas State Securities Board (TSSB) filed an emergency cease and desist order on June 3 against BG Wealth Sharing LTD, its associated exchange DSJ Exchange PTY Ltd, and three additional respondents, targeting a crypto and multi-level marketing scheme that promised investors 60% monthly returns, a 99.6% trading success rate, and guaranteed principal protection. The order names Texas-based recruiters Thaddious Thomas and Gagandeep Sarkaria alongside BG Wealth Sharing Group LLC, and describes how daily trading codes delivered via Bonchat, a messaging app, gave the platform the appearance of active trading while investors retained almost no control over their funds.

By the time the order landed, the FBI had already seized the scheme’s primary domain six weeks earlier, regulators in Washington state, Hawaii, the Philippines, and Canada had issued their own orders or warnings, and investors trying to exit had encountered two successive fee demands totaling up to 32 percent of account value while a successor platform quietly solicited fresh deposits under a different name.

The Signal System Behind DSJ Exchange

Investors received their daily trading edge through Bonchat, which pushed alphanumeric codes to participants each morning. Those codes were entered on DSJ Exchange PTY Ltd, the platform the scheme marketed as its dedicated crypto trading venue. Washington state’s Department of Financial Institutions (DFI), in its May 26 Summary Order targeting the operation and its associated exchange, described how the mechanics worked: operators claimed the codes authorized pooling of investor funds into short-term Bitcoin price bets. Those bets supposedly generated 60% monthly returns at a 99.6% success rate, with guaranteed principal protection and a doubling of invested capital in roughly 40 days. The DFI found all four claims false.

The Texas order described investors as relying on “expert systems, AI-enabled strategies, and scheduled trading codes.” From the platform’s dashboard, positions appeared to open and close profitably. Regulators concluded the display was manufactured, with no verifiable trading activity behind the numbers.

A recruitment tier ran alongside the trading mechanics. Participants who brought in new investors received additional daily codes along with promised minimum salaries, bonuses, and dividends. Events went beyond group chats: Washington’s order documented in-person recruiting nights in Las Vegas and Utah. The scheme presented itself as “the world’s largest hedge fund for retail investors,” built around a supposed professor named Stephen Beard. Investigators who tracked the network’s digital footprint later described Beard as a fictional, AI-generated persona assembled to give the operation a face.

The operation is believed to have launched in January 2025 and ran for roughly 15 months before its primary domain was seized. Its investor base spanned the United States, Canada, the Philippines, and Pacific island communities in Samoa and Tonga. Sarkaria, named in the Texas order, had publicly promoted the scheme as a regulated financial system while dismissing its MLM structure, even as she described team ranks and recruitment leadership hierarchies in the same presentations. Thomas appeared repeatedly in materials tied to the operation’s U.S. expansion.

The Fee That Grew as Withdrawals Froze

Two separate fee demands arrived over several weeks as the scheme began to collapse, each wrapped in the language of regulatory compliance.

A 20 Percent Handling Charge

Investors who tried to withdraw first encountered a handling fee of approximately 20 percent of account value. Texas regulators documented the charge, noting operators presented it as an anti-arbitrage and anti-money-laundering measure. Washington’s DFI confirmed the same fee structure in its Summary Order. The framing made an extraction mechanism sound like routine risk management. Whether the 20 percent payment brought investors closer to their funds, the DFI did not separately confirm; a second, larger demand was already coming.

The 12 Percent Compliance Demand

In late April 2026, the scheme disabled standard account withdrawals and told investors through Bonchat that a regulatory audit was underway. The explanation implied normal operations would resume once compliance was satisfied. What followed was a demand for 12 percent of each investor’s account value, payable out of pocket before any funds could move. The Texas order described the sequence directly:

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.

That language is from the Texas State Securities Board Emergency Cease and Desist Order, filed June 3, 2026. Washington’s DFI documented the practical outcome: one investor managed to withdraw $1,000, but only after first paying $2,000 to satisfy the compliance fee. The DFI stated plainly that legitimate financial institutions do not require advance payments to release investor withdrawals.

After formal regulatory actions accumulated across multiple states, operators shifted the narrative again. They blamed DSJ Exchange for the fraud allegations and directed investors toward a platform called HQIEX, described in the Texas order as a replacement exchange service. Texas regulators flagged the redirect as a mechanism to keep victims engaged while open questions remained about missing disclosures, fund custody, and potential commingling of investor money.

Government Filings That Said Nothing

The paper trail was designed to survive a basic compliance search. Both the scheme’s parent entity and its exchange incorporated in Colorado and submitted separate paperwork to two federal agencies, then used those filings as marketing credentials. Washington’s DFI detailed how the pattern worked:

• SEC Exempt Reporting Adviser filing: BG Wealth submitted a Form ADV Exempt Reporting Adviser (ERA) disclosure with the Securities and Exchange Commission. ERA status means a company self-reports managing private funds below certain size thresholds; it does not involve SEC review of the company’s investment claims, stated returns, or trading activity.
• FinCEN Money Service Business registration: DSJ Exchange registered as a Money Service Business (MSB) with the Financial Crimes Enforcement Network (FinCEN), a Treasury bureau that tracks financial flows. MSB registration is self-reported and carries no government endorsement of an investment platform’s legitimacy or financial promises.
• Fabricated approval certificates: Both companies produced fake certificates asserting that the SEC and FinCEN had approved their operations, then posted those certificates on BG Wealth’s website and included them in investor-facing materials as proof of regulatory standing.

Washington’s DFI called false government-filing claims “a common hallmark of scams” and noted that neither type of filing means the government reviewed or approved the companies’ activities. ERA status in particular has appeared in multiple crypto investment fraud investigations because the filing is self-initiated, searchable on the SEC’s EDGAR system under the SEC’s own name, and creates the visual impression of regulatory engagement without requiring the agency to review what the filer actually does with money.

From Manila to Austin, Seven Months of Orders

The Texas action arrived as the last in a sequence of formal regulatory proceedings and criminal actions that had been building across multiple jurisdictions. The Philippines’ Securities and Exchange Commission issued a cease and desist against BG Wealth Sharing and its alleged representative Stephen Beard on May 20, targeting the scheme’s use of its associated exchange to solicit investments from overseas Filipino workers with promises of 1.3 percent daily compounded returns on a $500 minimum deposit. Alberta’s securities regulator issued cease-and-desist letters to individual promoters on May 25 and noted in its press release that the scheme’s original website had been seized by U.S. law enforcement in late April.

The April 23 federal action connected the scheme to a broader criminal infrastructure. The DOJ’s Scam Center Strike Force unsealed criminal complaints that day against two Chinese nationals, Huang Xingshan and Jiang Wen Jie, charged with wire fraud conspiracy. The charges tied them to the Shunda compound in Min Let Pan, Burma, which operated from approximately January 2025 until local armed forces seized it in November 2025. Workers inside were trafficked individuals held against their will and forced to defraud victims under threat of violence, court filings state. A team under Jiang’s direct supervision defrauded a single American investor of more than $3 million using a fraudulent investment platform. Thai law enforcement arrested both men on immigration charges in early 2026 as they attempted to travel back to Burma from Cambodia, and the U.S. is seeking extradition.

The DOJ’s Operation Level Up, a joint FBI and U.S. Secret Service initiative tracking cryptocurrency investment fraud, reported as of March 2026 that it had notified 8,935 victims they were being scammed; 77 percent had been unaware until contacted. The initiative estimated it prevented approximately $562 million in additional losses for victims reached in time. Hawaii and Washington issued formal cease and desist orders alongside Texas; Utah and Alaska issued investor warnings without formal orders.

HQIEX and the Migration Pitch

Washington’s DFI updated its BG Wealth alert on May 15 to flag a new platform already collecting fees from the same investor pool. Participants were being redirected from the original exchange to HQIEX, presented as a migration service where frozen balances would transfer. To activate a new HQIEX account, investors were told to deposit at least $100 in USDT. A migration window ran May 14 to May 18, with messages through Bonchat and Telegram warning that missing the deadline meant losing access to their funds permanently. The artificial urgency had no legitimate basis; Washington’s DFI found that individuals who had already paid prior withdrawal fees were still unable to access their investments.

The DFI added HQIEX directly to its named-entity alert list and stated that cryptocurrency lost in investment scams is almost never recoverable. DFI Director Charlie Clark urged investors to “verify the status of entities with us prior to parting with their hard-earned money.” The Texas order, filed June 3, named the HQIEX redirect in its own findings, two weeks after Washington’s Summary Order and three weeks after the Philippines’ cease and desist.

Investigators documenting the successor platform found dozens of HQIEX-linked domains, many registered privately in March and May 2026, with Cloudflare beginning to disable portions of that infrastructure as fraud reports mounted. Some domains triggered phishing warnings in browsers before the migration window had even closed. Victims who believe they were defrauded can file a report with the FBI’s Internet Crime Complaint Center (IC3), the same channel Operation Level Up directs victims to use. Huang Xingshan and Jiang Wen Jie remain in Thai custody; their extradition to face wire fraud charges in U.S. courts is pending.

Disclaimer: This article is for informational purposes only and does not constitute investment, legal, or financial advice. Cryptocurrency investments carry significant risk, and funds lost to fraud are rarely recoverable through private means. Readers who believe they have been victimized by an investment scheme should consult qualified legal counsel and report the matter to relevant regulatory authorities. All figures cited are accurate as of publication.