Texas Shuts Down Massive Crypto MLM Scheme Promising 60% Returns

Texas Securities Board Halts Multi-State Crypto MLM Operation

Texas regulators have taken swift action to dismantle a highly deceptive cryptocurrency investment and multi-level marketing (MLM) program. The Texas State Securities Board (TSSB) issued an emergency cease-and-desist order against BG Wealth Sharing LTD and DSJ Exchange PTY Ltd, accusing them of targeting retail investors with fraudulent promises of overnight wealth.

The Anatomy of the Deception: Bonchat and Fake Trading Codes

According to state regulators, the operators leveraged a messaging application called Bonchat to distribute specific “trading codes” to participants. Investors were instructed to input these codes directly into the DSJ Exchange platform. This mechanism created a false illusion of active trading and market liquidity, while in reality, investors had virtually no control over their capital.

To accelerate growth, the scheme relied heavily on aggressive recruitment. Participants were promised additional trading codes and higher tier bonuses for bringing new victims into the fold, a classic hallmark of a Ponzi-style multi-level marketing structure.

“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.”

Outrageous Promises and “AI-Powered” Trading

To build trust among unsuspecting victims, the promoters of the Texas crypto MLM scheme utilized high-pressure sales tactics and fabricated performance metrics. The marketing materials boasted unrealistic statistics designed to appeal to FOMO (fear of missing out):

The Exit Scam: Extortionate Fees and Platform Migration

When investors attempted to cash out their supposed profits, they were met with immediate roadblocks. The operators demanded an upfront handling fee of 20% of the total account value, falsely claiming it was required for anti-arbitrage and anti-money laundering (AML) compliance.

Shortly after, the demands escalated. The platform blocked standard withdrawals entirely and demanded an additional 12% “exit tax” or “compliance fee” to be paid out-of-pocket before any funds could be released.

“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.”

As regulatory scrutiny intensified across the United States, the operators attempted a classic pivot. They blamed DSJ Exchange for the issues and urged victims to migrate their remaining funds to a new platform called HQIEX. Regulators warn that this is a common tactic to keep victims engaged, delay legal action, and obscure the trail of commingled funds.

A Coordinated Multi-State Crackdown

Texas is not alone in its pursuit of this fraudulent network. The emergency action highlights a growing multi-state effort to protect retail investors from predatory crypto schemes. Washington and Hawaii have already taken formal regulatory action against BG Wealth Sharing, while Utah and Alaska have issued public investor warnings.

FAQ

What is the Texas crypto MLM scheme?

It is an alleged fraudulent investment program operated by BG Wealth Sharing and DSJ Exchange that promised high passive returns through recruitment and automated trading codes, which has now been halted by Texas regulators.

What fees did the scammers demand for withdrawals?

The operators demanded a 20% handling fee for withdrawals, followed by an additional 12% out-of-pocket “exit tax” or compliance fee after disabling normal withdrawals.

What is HQIEX?

HQIEX is a replacement exchange recommended by the scheme’s operators after regulators began investigating DSJ Exchange. Regulators warn it is a tactic to prolong the scam and prevent victims from recovering funds.