Ponzi

USDD

ZachXBT

Butter

A crypto Ponzi scheme operating under the names DSJ Exchange (DSJEX) and BG Wealth Sharing collapsed last week.
ZachXBT revealed that he was part of the team responsible for coordinating an effort between Tether, the security team at Binance, OKX, and American law enforcement agencies to freeze assets worth $41.5 million. This was a scam that started way back in 2025 and offered its investors a return of between 1.3% and 2.6% daily, apart from referral and ranking bonuses.
<h3 id="crypto-scheme-used-a-fictitious-ceo-and-rotating-infrastructure">Crypto scheme used a fictitious CEO and rotating infrastructure</h3>
DSJ was a dummy trading platform, while BG was an investment firm related to it. There was a dummy CEO called Stephen Beard who was the face of the scam to the public, and there was a constant change of domain names and hot wallets.
There was a push for recruiting members and fake trade signals in a group in BonChat, a messaging app that originated from Hong Kong. The fact that the fraudulent entity created a fake identity for the leader, used a rotating network of infrastructure, and recruited via social media made the scam hard to trace.
<blockquote class="twitter-tweet">
 1/ The $150M+ DSJ Exchange (DSJEX) / BG Wealth Sharing Ponzi scheme collapsed last week. From April 27 – May 3, illicit actors laundered $92M+ across chains to obscure the trail.
 I helped lead an initiative with @Tether_to, <a href="https://twitter.com/binance?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@Binance</a> Security Team, <a href="https://twitter.com/okx?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@OKX</a>, &amp; US law enforcement that… <a href="https://t.co/h85hQ5IeRD" rel="noopener noreferrer nofollow">pic.twitter.com/h85hQ5IeRD</a>
 — ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/2051645845993648517?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 5, 2026</a>
</blockquote>
A total of thirteen regulators in five continents had issued public warnings against DSJ and BG prior to the collapse. The US authorities had also seized one of the sites, bgwealthsharing[.]com, used by the scammers on April 23, 2026. Even after this seizure, the scam operated for some time until the withdrawal function was completely blocked.
On May 2, 2026, a video purporting to be filmed with Stephen Beard was uploaded, saying DSJ will launch its initial public offering and would require 12% of the users’ account balances in taxes as per regulations. At this point, withdrawal of money from the platform had stopped functioning.
<h3 id="92-million-laundered-across-chains-in-7-days">$92 million laundered across chains in 7 days</h3>
Between April 27 and May 3, 2026, illegal parties conducted over $92 million worth of transactions from DSJ and BG hot wallets on multiple chains and exchanges. The illicit laundering techniques used include token swap on Tokenlon, bridging through Bridgers, Butter Network, and USDT0, USDD wrap and unwrap, and consolidating transactions on multiple wallet addresses.
ZachXBT <a href="https://x.com/zachxbt/status/2051645845993648517?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E2051645845993648517%7Ctwgr%5Efe1da9785631850b312e12134897a55dd9a04bbc%7Ctwcon%5Es1_c10&amp;ref_url=https%3A%2F%2Fwww.cryptopolitan.com%2Fwp-admin%2Fpost.php%3Fpost%3D215227action%3Deditclassic-editor" rel="noopener noreferrer nofollow">identified</a> the transfer of more than $93 million in funds from the consolidations on multiple deposit addresses in the seven-day period. The biggest amount was deposited into the Cobo platform, totaling $63 million throughout the week.
According to ZachXBT, he learned about the incident while investigating the contract flows of USDD for another matter. He did a timing analysis to identify withdrawal patterns and located Solana and Tron deposits to <a href="https://www.cryptopolitan.com/binance-announces-binance-online-event/" rel="noopener noreferrer nofollow">Binance</a> with matching Tron withdrawals.
That information was shared with relevant parties, and on May 4, 2026, <a href="https://www.cryptopolitan.com/tether-1-billion-in-profits-from-gold-in-q1/" rel="noopener noreferrer nofollow">Tether</a> froze $38.4 million based on the findings. An additional $3.1 million was frozen at various services and exchanges, bringing the total frozen to $41.5 million.
<h3 id="crypto-fraud-targeted-retail-investors">Crypto fraud targeted retail investors</h3>
ZachXBT called DSJ and BG as part of a category of Chinese investment frauds that are obvious to most experienced observers but deliberately designed to target retail investors through social media channels. He also noted that many users still appeared to be in denial about having been scammed.
The $150 million figure cited across coverage of the scheme is described as a floor rather than a ceiling. The operation ran since 2025 and involved thousands of victim exchange withdrawals. ZachXBT credited early coverage of the investment fraud to researchers at dehek and BehindMLM.
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DSJEX team freezes $41.5M after alleged $150M crypto Ponzi crash

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