Tether has frozen $38.4 million in USDT on TRON after on-chain investigator ZachXBT traced funds tied to the collapse of the DSJ Exchange and BG Wealth Sharing investment scheme.
In an X thread on May 5, ZachXBT said the DSJEX/BG Wealth Sharing scheme had collapsed the previous week after growing into a more than $150 million suspected Ponzi operation. He said illicit actors laundered more than $92 million across chains between April 27 and May 3 to hide the movement of funds.
ZachXBT said he helped coordinate with Tether, Binance Security, OKX, and U.S. law enforcement, resulting in more than $41.5 million being frozen so far. Of that amount, $38.4 million was frozen by Tether on May 4, while another $3.1 million was frozen at different services and exchanges.
The freeze came after ZachXBT said he performed timing analysis across Solana and TRON deposits to Binance and matched them with TRON withdrawals. A screenshot shared in the thread showed a USDT blacklist event involving 19 TRON addresses, including one address with about $9.4 million and several others holding between $1 million and $2 million each.
How the BG Wealth Ponzi Scheme Worked
According to ZachXBT, DSJ/BG Wealth Sharing had been operating since 2025 while advertising daily returns of 1.3% to 2.6%, referral commissions, and rank-based bonuses. He described DSJ as a fake trading platform and BG as the investment group behind the recruitment structure.
Regulatory warnings had already raised similar concerns. The Alberta Securities Commission said BG Wealth Sharing was linked to a web-based trading platform known as DSJ Exchange and was promoted through social media and messaging apps as a hedge fund using AI-generated trading signals. The regulator said the scheme claimed to produce guaranteed or near-perfect trades and promised to rapidly double investors’ money.
Utah’s Division of Securities also warned that BG Wealth Sharing claimed to offer high-return opportunities through a hedge fund involving DSJ Exchange, but the investments may not have been registered with state or federal regulators. The Utah notice said BG Wealth and DSJ falsely claimed SEC licensing, adding that an exempt adviser filing or Form D should not be treated as proof of legitimacy.
Regulators Had Warned Investors Before Collapse
The alleged scheme had already drawn warnings across multiple jurisdictions. Utah cited alerts from regulators in Canada, New Zealand, Tonga, Samoa, the U.K., the Philippines, Utah, and Washington.
The U.K. Financial Conduct Authority listed “BG Wealth Sharing / dsjex.net” as an unauthorized firm in May 2025, warning that it may have been providing or promoting financial services without permission.
In February 2026, Tonga’s central bank and New Zealand’s Financial Markets Authority warned investors about BG Wealth/DSJ EX, describing it as part of a wider Ponzi-style investment scam known as TXEX. The notice said the scam used MLM-style recruitment tactics and that the FMA had listed 813 websites and 30 entities linked to the operation.
The British Columbia Securities Commission also placed BG Wealth Sharing Ltd. on its investment caution list in January 2026, stating that the company was not registered with the regulator.
Funds Moved Through Swaps, Bridges and Exchanges
ZachXBT said funds from DSJ/BG hot wallets were laundered through token swaps, cross-chain bridges, wrapping and unwrapping of USDD, and consolidation across hundreds of addresses.
He traced more than $93 million in outflows from consolidation addresses to multiple deposit addresses between April 27 and May 3. The entities named in the thread included Cobo, Binance, OKX, and other service-linked deposit addresses.
The investigator also said U.S. law enforcement seized one BG Wealth Sharing domain on April 23. In another post, he said a person presented as “Stephen Beard” acted as the platform’s fictitious CEO and later posted a video claiming DSJ would soon IPO while demanding a 12% “tax” on account balances as part of an alleged regulatory process. ZachXBT said withdrawals had already been disabled by that point.
Utah’s investor alert separately warned that demands for upfront “taxes” or fees to release funds are a common exit-scam tactic and advised victims not to send more money to unlock accounts.
Why This Matters
The freeze adds to a growing list of cases where stablecoin issuers and exchanges have acted after blockchain investigators traced scam proceeds across chains. For victims, however, a freeze does not automatically mean recovery. It only prevents the blacklisted funds from moving while law enforcement and service providers continue their review.
ZachXBT said the $150 million estimate is likely lower than the real figure because the scheme had operated since 2025 and involved thousands of victim withdrawals from exchanges.
The case also shows how quickly large scam proceeds can move through token swaps, bridges, and exchange deposit addresses once withdrawals are disabled. For crypto users, the warning signs remain the same: guaranteed daily returns, referral-based recruitment, fake trading signals, upfront withdrawal “taxes,” and pressure to bring family or community members into the platform.
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