ZachXBT Freezes $41.5M After $150M Crypto Ponzi Scheme Collapse

The collapse of the DSJ Exchange and BG Wealth Sharing Ponzi scheme has exposed a $150 million fraud operation that targeted retail investors throughout 2025. On-chain investigator ZachXBT identified the scheme while tracking USDD contract flows, eventually tracing the movement of over $92 million in illicit funds across the Solana and Tron networks. The rapid coordination between private investigators, centralized exchanges, and stablecoin issuers resulted in the freezing of $41.5 million in assets, a rare outcome in the aftermath of large-scale retail fraud.

Tracking the Flow of Illicit Capital

Between April 27 and May 3, the operators of the scheme attempted to obfuscate the trail of stolen funds by moving them across multiple blockchain networks. ZachXBT identified a specific consolidation pattern where approximately $63 million was funneled to the custody provider Cobo across four distinct wallet addresses on the Tron network. By performing timing analysis on these deposits, the investigator was able to match the movement of funds to specific accounts on the Binance exchange. This granular tracking allowed for the subsequent intervention by major industry players.

On May 4, the recovery effort saw Tether freeze $38.4 million in assets associated with the fraudulent addresses. An additional $3.1 million was secured through coordinated efforts with other platforms. While these actions successfully immobilized a portion of the stolen capital, the total losses are estimated to exceed $150 million. ZachXBT noted that this figure is likely conservative, as the scheme operated for over a year and involved thousands of individual victim withdrawals that have not yet been fully accounted for in the total loss tally.

Operational Mechanics and Retail Targeting

The scheme functioned as a classic investment fraud, specifically engineered to exploit retail participants with limited technical knowledge of blockchain mechanics. By utilizing social media channels to reach unsophisticated investors, the operators maintained a facade of legitimacy that persisted for over a year. The simplicity of the Ponzi structure, while transparent to experienced market participants, proved effective at scale. The crypto market analysis suggests that such schemes often rely on the psychological barrier of denial, as evidenced by victim reports on social media platforms following the collapse.

ZachXBT, who typically focuses on complex hacks and protocol exploits, noted that he rarely pursues Ponzi schemes due to their repetitive nature. This investigation was an exception, initiated by chance during an unrelated review of USDD contract activity. The success of the asset freeze relied heavily on direct cooperation with Binance, OKX, and US law enforcement, highlighting the importance of real-time data sharing between on-chain investigators and centralized entities.

Risk Mitigation and Future Exposure

For those who may have been exposed to these platforms, the primary path for potential recovery involves filing formal reports with local law enforcement. In the United States, the FBI’s Internet Crime Complaint Center remains the primary channel for documentation. The speed of the freeze on the $41.5 million demonstrates that when on-chain evidence is provided to exchanges and stablecoin issuers in a timely manner, the ability to halt the movement of funds is significant. However, the remaining $100 million-plus in estimated losses remains largely unaccounted for, underscoring the difficulty of recovering assets once they have been dispersed through complex mixing or non-custodial channels.

Investors should remain skeptical of platforms promising high, guaranteed returns through social media solicitation, as these remain the primary vectors for such fraud. While the industry has seen crypto equities rally on Digital Asset Market Clarity Act deal, the persistence of these retail-focused schemes indicates that regulatory and technical clarity has not yet eliminated the threat of sophisticated social engineering. Moving forward, the ability of investigators to map deposit addresses to exchange accounts will continue to be the most critical factor in mitigating the impact of large-scale exit scams.