On-chain detective ZachXBT has shared details about the massive crypto Ponzi scheme that took more than $150 million from unsuspecting victims before collapsing last week.
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The Mechanisms Behind the $150 Million Crypto Ponzi
In a series of X-posts, ZachXBT revealed the details of a Ponzi scheme that operated since 2025 under the DSJ Exchange (DSJEX), a fake trading platform, and BG Wealth Sharing, a fraudulent investment scheme. The scam involved a fake CEO named Stephen Beard, a self-proclaimed professor who represented the platform to the public.
According to Tuesday’s thread, DSJEX and BG Wealth advertised daily returns of 1.3%-2.6%, with referral commissions and rank-based bonuses. Additionally, Beard pushed recruitment and fake trading signals through a group on Hong Kong messaging app BonChat.
The Washington State Department of Financial Institutions (DFI) recently announced this explained that investors used these trading signals on the DSJ exchange and were led to believe that the crypto investments were generating returns.
BG Wealth and DSJ claimed to be licensed by the US Securities and Exchange Commission (SEC), but the DFI found that none of the forms filed by these companies indicated they were registered with the SEC.
Thirteen regulators on five continents had issued public fraud warnings on the companies, including the UK’s Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), the Philippine SEC and the DFI in Washington.
On April 23, US law enforcement seized one of BG Wealth’s domains as part of a joint operation conducted by Operation Level Up and the Scam Center Strike Force. However, the scam remained active for about a week.
Last Saturday, Beard posted a video confirming that DSJEX would soon go public and demanding a 12% “tax” on account balances as a condition of the regulatory process. But the scammers had already disabled recordings at that point.
Tether and exchanges freeze $41.5 million
Following the involvement of US authorities, the malicious actors laundered over $92 million worth of crypto assets through chains. ZachXBT noted that the scammers frequently switched between domains and hot wallets to evade law enforcement.
Between April 27 and May 3, the crypto funds were laundered through token swaps, bridging via Bridgers, Butter Network and USDT0, USDD packing and unpacking, and consolidation of transactions across hundreds of addresses.
The crypto sleuth traced the millions of outflows through a timing analysis, located Solana/Tron deposits at Binance and found matching Tron withdrawals. He then provided details to the relevant parties, including Tether, the Binance security team, OKX and US law enforcement.
As a result, Tether froze $38.4 million on May 4, while another $3.1 million was frozen across various crypto services and exchanges, bringing the total to $41.5 million.
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Despite the significant recovery, the on-chain detective noted that the scam’s $150 million estimate is “likely significantly higher since the scheme has been active since 2025, with thousands of victim recordings identified.”
Ultimately, he advised victims of DSJEX and BG Wealth’s scheme to file police reports in their jurisdictions to support global investigations and possible restitution of laundered proceeds.
Featured image from Unsplash.com, chart from TradingView.com