In Denver, Colorado, a pastor leading an online church, Eli Regalado, and his wife Kaitlyn, are facing accusations of defrauding their Christian community of $1.3 million through a cryptocurrency scheme.
The couple had promoted their cryptocurrency, INDXcoin, claiming divine guidance that people would become wealthy through their investment.
According to the Colorado Division of Securities, the Regalados raised about $3.2 million from over 300 individuals, but a significant portion, at least $1.3 million, was allegedly used for the couple's personal expenses.
The Division of Securities revealed that the Regalados lacked experience in cryptocurrency, with a third-party auditor's report indicating that INDXcoin was unsafe, unsecure, and fraught with technical issues.
Despite these findings, they reportedly continued to sell their cryptocurrency as a low-risk, high-reward investment.
The INDXcoin was described as "illiquid and practically worthless" in the court complaint.
The funds gathered from investors were allegedly spent on a luxurious lifestyle by the Regalados, including purchasing a Range Rover, luxury handbags, jewelry, employing an au pair, and indulging in boat rentals and snowmobile adventures, as per NBC News.
"We allege that Mr. Regalado took advantage of the trust and faith of his own Christian community and that he peddled outlandish promises of wealth to them when he sold them essentially worthless cryptocurrencies," said Commissioner Chan.
"New coins and new exchanges are easy to create with open source code. We want to remind consumers to be very skeptical."
Regalado, in a video statement to his INDXcoin community, confessed that the allegations of pocketing $1.3 million were true.
"The charges are that Kaitlyn and I pocketed $1.3m, and I just want to... say that those charges are true."
"There's been $1.3m that's been taken out of, I think, $3.4m, but out of the 1.3, half a million dollars went to the IRS, and a few hundred thousand dollars went to a home remodel the Lord told us to do."
He disclosed that half a million dollars went to the IRS and several hundred thousand dollars funded a home remodel "the Lord told us to do."
He expressed a desire to explain their actions in court, admitting they took God at his word and sold a cryptocurrency without a clear exit strategy.
"I don't want to mince words or escape but I want to... tell you how we got here. It wasn't that we had a million dollars sitting there and decided to go crazy with it."
He added: "We're going to go to court and we're going to argue our case and say why we did it, and here's all the journal entries leading up to this, but, yes, we're in agreement, we did do this," he adds.
"We took God at his word and sold a cryptocurrency with no clear exit."
"What we're believing for still is that God is going to do a miracle. God is going to work a miracle in the financial sector."