$38M USDT Frozen After $150M Ponzi Scheme Collapse: ZachXBT Exposes DSJ Scam

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Tether Freezes $38M USDT After $150M DSJ Ponzi Collapse: ZachXBT

Show AI Summary
Tether freezes $38.4 million in USDT on TRON due to suspected Ponzi scheme ties.
Over $92 million is laundered across chains in a week to hide fund movements.
More than $41.5 million is frozen by authorities and exchanges to curb illicit activity.

Tether has blocked $38.4 million worth of its USDT cryptocurrency on the TRON network. This action follows an investigation by ZachXBT, who linked the funds to the failures of both the DSJ Exchange and the BG Wealth Sharing investment program.

On May 5th, ZachXBT reported on X that the DSJEX/BG Wealth Sharing scheme had failed the previous week, and was likely a Ponzi scheme involving over $150 million. He also stated that those involved illegally moved more than $92 million between April 27th and May 3rd in an attempt to conceal the funds.

The DSJ Exchange (DSJEX) / BG Wealth Sharing Ponzi scheme, which involved over $150 million, fell apart last week. Between April 27th and May 3rd, those running the scheme moved over $92 million across various blockchains to hide where the money came from. I was part of a team with Tether, Binance Security, OKX, and US law enforcement that worked to address this.

— ZachXBT (@zachxbt) May 5, 2026

ZachXBT worked with Tether, Binance Security, OKX, and U.S. law enforcement to freeze over $41.5 million in funds. Tether froze $38.4 million on May 4th, and an additional $3.1 million was frozen by other services and exchanges.

The recent halt in funds came after researcher ZachXBT discovered a pattern in deposits to Binance from both Solana and TRON, linking them to TRON withdrawals. He shared a screenshot showing that Binance had blacklisted 19 TRON addresses, including one holding around $9.4 million and several others with balances between $1 million and $2 million each.

How the Alleged Scheme Worked

ZachXBT reports that DSJ/BG Wealth Sharing has been running since 2025, promising daily returns of 1.3% to 2.6%, as well as referral bonuses and rewards based on ranking. He claims DSJ is a fraudulent trading platform and BG is the group organizing the recruitment of new investors.

Warnings from financial regulators had previously flagged similar issues. The Alberta Securities Commission stated that BG Wealth Sharing was connected to an online trading platform called DSJ Exchange, advertised on social media and messaging apps as a hedge fund that used AI to generate trading signals. The scheme falsely claimed to consistently deliver profitable trades and quickly double investors’ money.

Utah securities officials cautioned investors about BG Wealth Sharing, which promoted high-return investments through a hedge fund linked to DSJ Exchange. These investments may not have been properly registered with authorities. The state also found that BG Wealth and DSJ falsely stated they were licensed by the SEC, and warned that simply having a filing with regulators doesn’t guarantee a business is legitimate.

Regulators Had Warned Investors Before Collapse

As a researcher, I’ve found that this suspected operation was already raising red flags internationally. Regulators in several places – including Canada, New Zealand, Tonga, Samoa, the U.K., the Philippines, as well as here in Utah and Washington – had already issued warnings about it.

In May 2025, the U.K. Financial Conduct Authority identified “BG Wealth Sharing / dsjex.net” as an unregistered firm and cautioned that it might be offering financial services illegally, without the necessary authorization.

As a crypto investor, I was pretty concerned to see the warnings from Tonga’s central bank and New Zealand’s Financial Markets Authority back in February 2026 about BG Wealth/DSJ EX. They flagged it as a Ponzi scheme – part of something bigger called TXEX. Apparently, they were recruiting people in a pyramid-scheme style, and the FMA had already identified a huge network linked to it – over 800 websites and 30 different companies! It’s a good reminder to be extra careful with any investment opportunities that seem too good to be true.

In January 2026, the British Columbia Securities Commission added BG Wealth Sharing Ltd. to its list of companies to be cautious of, because the company isn’t registered with the regulator.

Funds Moved Through Swaps, Bridges and Exchanges

According to ZachXBT, the money stolen from DSJ and BG’s digital wallets was hidden by converting it into different cryptocurrencies, moving it between different blockchains, and splitting it across many different accounts. This involved techniques like swapping tokens, using bridges between blockchains, and converting USDD back and forth.

Between April 27th and May 3rd, over $93 million was moved from a group of combined addresses to various deposit locations. The transactions involved companies like Cobo, Binance, and OKX, as well as other addresses connected to these services.

The investigator also stated that U.S. authorities seized a domain linked to BG Wealth Sharing on April 23rd. They also reported that the person pretending to be the platform’s CEO, known as “Stephen Beard,” falsely announced an upcoming IPO for DSJ and then requested a 12% “tax” on user account balances, claiming it was required for regulatory reasons. According to ZachXBT, users were already unable to withdraw their funds at this time.

Utah’s securities regulators have cautioned investors that being asked to pay upfront “taxes” or fees to access their money is a typical sign of a scam. They advise against sending any more funds to supposedly unlock accounts.

Why This Matters

This freeze is the latest in a series of actions taken by stablecoin companies and exchanges after investigators identified funds from scams moving between different blockchains. While a freeze stops these funds from being transferred, it doesn’t guarantee victims will get their money back – it simply pauses things while law enforcement and other services investigate further.

As a researcher following this case, I believe the estimated $150 million loss is probably an underestimate. The scheme appears to have been running since 2025, and my data indicates that thousands of individuals made withdrawals from various exchanges as part of it.

This case highlights how rapidly stolen funds from scams can be transferred through various crypto services like token swaps and bridges, especially when withdrawals are blocked. Crypto users should still be wary of these red flags: promises of guaranteed daily profits, schemes that rely on recruiting new members, false trading advice, requirements to pay fees before withdrawing money, and pressure to involve friends and family.

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2026-05-05 16:29