A bizarre case highlighting the dark side of cryptocurrencies has emerged in Colorado, where a Denver-based online pastor finds himself facing legal consequences for allegedly defrauding hundreds of investors to the tune of over $3 million and personally pocketing $1.3 million.
TLDR
- Pastor Eli Regalado sold over $3 million worth of a cryptocurrency called INDXcoin to followers of his online church, promising them 10x returns. He has now admitted the charges against him are true.
- Regalado claims God told him to launch INDXcoin and give his followers wealth through it. Half the $1.3 million he and his partner withdrew allegedly went to taxes and home renovations ordered by God.
- After the cryptocurrency exchange Regalado launched failed in November 2022, investors had no way to cash out their now worthless INDXcoin. Regalado says he is still believing God will perform a “miracle” so investors can get their money back.
- Colorado securities regulators allege Regalado targeted Christian communities and spent the majority of funds raised on luxury items like cars, vacations, purses and cosmetic dentistry for himself and his partner.
- Over 300 investors put approximately $3.2 million total into INDXcoin through Regalado’s Kingdom Wealth Exchange platform before he halted operations in November 2022.
Eli Regalado, founder of the digital token INDXcoin and operator of the Kingdom Wealth Exchange platform used to sell it, admitted in a recent video statement that charges leveled against him and his partner by state securities regulators have merit. But Regalado also doubled down on claims that his actions were ordained by God.
Regalado is pastor of the online-only Victorious Grace Church. According to a civil lawsuit filed January 18th in Denver District Court, between June 2022 and April 2023 Regalado was able to raise close to $3.2 million through sale of the otherwise worthless INDXcoin to more than 300 investors – mostly members of his own congregation.
The majority of funds were spent to personally enrich Regalado and his partner Kaitlin Regalado, alleges Colorado Securities Commissioner Tung Chan. Bank records reveal the couple indulged in luxury automobiles, vacations, expensive jewelry and accessories, dental work, and even used over $300,000 on home remodeling. Regalado confirms he and Kaitlin withdrew $1.3 million total, with about half going to taxes and the rest used on the house remodel per God’s instructions.
An online pastor was charged in CO for a $1.3 million crypto scam. He's released a 9-minute-long video explaining that the Lord told him to sell a cryptocurrency with no clear exit", and spend some of the proceeds on "a home remodel the Lord told us to do".
Here's a supercut. pic.twitter.com/scKpF8nyrT
— Molly White (@molly0xFFF) January 21, 2024
In his video responding to the allegations, Regalado does not deny using the substantial sums raised from investors as his own personal piggy bank. He does claim the idea originated directly from the Almighty himself. Regalado says making tenfold returns for his flock was a special mandate delivered straight from the Lord, their material wealth accumulation a means of entering heaven.
The INDXcoin digital token and Kingdom Wealth Exchange used to facilitate its trading were both shut down by Regalado as of November 2022. This rendered the assets purchased by his followers essentially worthless overnight. The pastor says issues with exchange software and lack of finances for servers forced his hand; investigators counter it was a last ditch attempt to cover his tracks amid heightening scrutiny.
In another twist adding insult to injury, the state’s complaint reveals cyber security auditors Hacken gave INDXcoin their lowest possible grade of “0/10.” Yet Regalado actively touted positive assessments to bolster perceptions of the token’s legitimacy. For investors left holding the bag, he says prays a divine miracle will make them financially whole someday.
While admittedly light on details for engineering such a supernatural solution, Regalado remains adamant that God is not done with INDXcoin yet. Supportive comments under his video statement indicate some followers may still be inclined to take him at his word. But regulators are having none if it, slamming his schemes as fraudulent from the start and saying he shamelessly capitalized on trust within the Christian community.
For now the pastor’s bank accounts and those of associated entities remain frozen by court order. He and Kaitlin are due for a hearing on January 29th to answer for the alleged violations of securities law. Time will tell whether divine providence intervenes on their behalf. But investors probably shouldn’t hold their breath waiting to recoup $3 million in crypto losses.
