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ToggleThe "Dark Knight" of the cryptocurrency community has once again done a great service! The notorious Crypto DSJ Exchange (DSJEX) and BG Wealth Sharing collapsed last week, but fortunately, more than $40 million of victims' funds have been successfully intercepted.
According to a detailed investigation report released today (5th) on X (formerly Twitter) by renowned blockchain detective ZachXBT, he assisted in leading a cross-agency joint law enforcement operation that successfully prevented the transfer of assets in this massive scam involving more than $150 million.
Luring victims with a 2.6% daily wage, the fake CEO even demanded "taxes" before absconding.
According to ZachXBT, DSJ (a fake trading platform) and BG (an investment group) have been operating since 2025, primarily recruiting retail investors through the BonChat group in Hong Kong. They attracted investors by offering "high returns of 1.3% to 2.6% per day" and multi-level referral commissions.
To increase credibility, the group even hired a fictitious CEO named "Stephen Beard" as its front man and frequently changed domains and hot wallets to evade detection. In fact, as many as 13 regulatory agencies across five continents have issued fraud warnings against the organization; and U.S. law enforcement agencies seized some of its domains on April 23 this year.
The most absurd thing is that, even though the withdrawal function had already been shut down, this fake CEO released a video on May 2nd claiming that DSJ was about to "IPO" and demanding that investors pay a 12% "tax" on their account balance in order to cooperate with the regulatory process—this is undoubtedly the most classic "second harvest" tactic before a Ponzi scheme runs away.
ZachXBT unexpectedly uncovers a massive money laundering operation involving 90 million US dollars worth of magnesium.
After realizing their scheme had been exposed, the fraud ring began frantically transferring funds. ZachXBT's investigation revealed that between April 27 and May 3, the perpetrators laundered over $92 million using sophisticated methods, including Tokenlon, Bridgers, Butter Network cross-chain bridges, and the repackaging and unpacking of USDD.
This huge sum of money eventually flowed to multiple deposit addresses, with approximately $63 million going to the digital asset custody platform Cobo and another $30 million going to the exchange OKX.
Interestingly, ZachXBT admitted that he rarely investigates Ponzi schemes (because they are low-tech and repetitive), but this time he discovered the unusual funds by chance while reviewing the flow of USDD smart contracts in another case.
In collaboration with Tether and exchanges, $41.5 million was successfully frozen.
After locking down the flow of funds, ZachXBT immediately conducted a rigorous time analysis, comparing withdrawal records with data deposited into Binance on the Solana/Tron chain, and quickly submitted the evidence to the relevant authorities.
The operation ultimately achieved significant results: through close cooperation with Tether, the Binance security team, OKX, and US law enforcement agencies:
- Tether: On May 4, it took a major step by freezing up to $38.4 million worth of USDT.
- Major exchanges/services have jointly frozen over $3.1 million .
- Total: More than $41.5 million of illicit funds have been successfully frozen.
At the end of his post, ZachXBT earnestly warned that although these Chinese investment scams are very crude, they specifically target inexperienced retail investors, and many victims are still in a denial phase, unwilling to believe they have been scammed. He urged DSJ/BG victims to report the case to their local police as soon as possible, pointing out that the estimated $150 million loss is likely just the tip of the iceberg, and the actual scale of the losses may be far greater.
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