Eli Regalado responded to the allegations by posting a 10-minute video on the website of his cryptocurrency project. Eli Regalado/INDXcoin
One of the best parts of writing about crypto is the constant supply of colorful villains. Think of the wild-haired Sam Bankman-Fried, whose $30 billion scam attracted celebrities and politicians, or “Razzlekhan,” the wannabe rapper who was half of the duo Bonnie and Clyde behind one of the world's largest bitcoin heists. Last week brought us a new name to add to our crew of scammers: Denver internet pastor Eli Regalado, whose sheer audacity should earn him an honorable mention on any list of crypto villains ever.
According to Colorado's securities regulator, Regalado ran a small scam in which he and his wife raised more than $3 million to convince hundreds of people to invest in something called the INDX coin. His pleas, which were heavy on Old Testament-style words like sowing and tithing, promised those connected to his online church that they would receive a 10-fold return by purchasing them.
Not surprisingly, they did not earn 10 times more, but they lost their money – not least because the Regalados spent a significant portion of it sprucing up their home, according to the regulator. A Denver business publication also reported that the couple spent more of the money — which they said would help “widows and orphans” — on a Range Rover, jewelry, and of course, luxury handbags.
These reports indicate that Regalado is facing a fair amount of trouble, but instead of keeping quiet and looking for a good lawyer, he responded to Colorado's allegations by posting a 10-minute video on the cryptocurrency project's website. Near the opening, he says it wasn't his decision to embezzle money, but that “several hundred thousand went into the home remodeling that the Lord asked us to do.”
Later in the video, Regalado explains that he launched the cryptocurrency campaign because he believed “God was doing something new.” While his doctrine may be shaky, his understanding of finance may be even worse, as Regalado in the video throws around terms like leverage and liquidity without seeming to understand what they mean. In one video, he describes “$300 million worth of coins that were farmed before the exchange went live” — but as the Colorado regulator explains, the coins are worthless, largely because the only place they can be traded is The wealth of the kingdom. Exchange, a service run by Regalados that has gone out of business and is barely functioning in the first place.
The next steps will likely involve the state of Colorado seizing any remaining funds available and returning them to investors. Meanwhile, Regalado used his video to predict that the INDX chaos will end on its own because “God will perform a miracle in the financial sector.”
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
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