DivineCoin crash wipes $120M from 1,500 investors

Eli Regalado, a former software engineer, announced on Thursday that his startup, DivineCoin, had launched a new cryptocurrency that claimed to be “God‑driven,” promising investors a guaranteed return backed by divine insight. The company, headquartered in Austin, Texas, had raised $48 million from venture capital firms and angel investors before the launch. Within two weeks, the token’s value collapsed to zero, wiping out the accounts of more than 1,500 investors who had deposited a combined $120 million.

The story came after Regalado and his wife, Maria, claimed to have received a divine message instructing them to create a blockchain that would “align human prosperity with a higher purpose.” The company’s marketing team produced a series of videos featuring the founders speaking in a trance‑like state, citing scripture and cryptographic proofs that were later found to be fabricated. Analysts say the scheme mirrors past crypto scams that exploit religious sentiment, such as the 2018 “Angel Token” fraud that defrauded investors of $70 million.

Regalado’s company was immediately flagged by the U.S. Securities and Exchange Commission, which opened an investigation into possible securities fraud and deceptive marketing. The Commodity Futures Trading Commission has also requested documents from the firm. Regulators are scrutinizing whether the company misrepresented its technology and promised guaranteed returns, which would violate federal securities laws. Investors have filed a class‑action lawsuit seeking restitution and damages for the losses incurred.

If the investigation confirms fraudulent activity, Regalado could face criminal charges, including wire fraud and conspiracy to commit securities fraud. The case highlights a growing trend of cryptocurrency ventures that use spiritual or mystical claims to attract capital. Experts warn that the lack of regulatory oversight in the crypto market makes it a fertile ground for such schemes, urging investors to conduct due diligence and remain skeptical of guarantees that sound too good to be true. The outcome of the investigation will set a precedent for how regulators handle crypto projects that blend faith with finance.