Texas halts alleged crypto MLM promising 60% monthly returns

On June 3 the Texas State Securities Board issued an emergency cease-and-desist order against BG Wealth Sharing LTD and DSJ Exchange PTY Ltd, alleging an online crypto investment and multilevel marketing scheme that targeted Texas residents with promises of very high monthly returns.

The order names BG Wealth Sharing Group LLC and two individuals, Thaddious Thomas and Gagandeep Sarkaria. Regulators say BG Wealth distributed timed trading codes through the Bonchat messaging app and instructed investors to enter those codes on the DSJ platform. Authorities allege that process made accounts appear active while giving investors little control over actual trades.

The order describes recruitment pitches that promised guaranteed principal protection, a 99.6% trading success rate and monthly returns of at least 60%. Regulators say recruiters told investors a small initial deposit could generate “lifetime monthly income” and that aggressive referral bonuses could turn participants into millionaires within months. The order alleges participants received additional trading codes when they recruited new investors, creating a multilevel marketing structure tied to incoming funds.

Regulators flagged withdrawal restrictions and fees. The order states standard withdrawals were disabled and an initial handling fee of about 20% of account value was presented as an anti-arbitrage or anti-money-laundering charge. The operators then demanded an additional 12% payment. “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,” the order states.

The order also raises concerns about claims of AI-assisted trading and the lack of transparency around custody of funds, real trading results and possible commingling. Regulators allege respondents later directed investors to a replacement service called HQIEX after officials began issuing warnings.

Washington and Hawaii have taken formal securities actions related to BG Wealth or affiliated entities, and Utah and Alaska issued investor alerts. The Texas order seeks to halt the defendants’ activities and preserve assets while authorities investigate the claims about returns, recruitment incentives, trading practices and withdrawal restrictions.