A Colorado pastor and his wife are in trouble this week after they allegedly pocketed millions of dollars raised through a cryptocurrency they marketed to devout Christians — and claimed it was created because of God's instructions.
A Denver-area couple, Pastor Eligio “Eli” Regalado and his wife Caitlin, have reportedly raised about $3.2 million through sales of INDXcoin, a cryptocurrency they issued through an online church, Victorious Grace.
Earlier this week, the Colorado Securities Commissioner filed a lawsuit against the couple, alleging that they fraudulently deceived investors and illegally sold securities without proper registration. On Thursday, a Colorado judge froze the assets of Victorious Grace Church based on those allegations.
According to legal filings filed by the state, the Regalados claimed that INDXcoin was tied to a cryptocurrency index, and backed by enough assets to secure that peg. In fact, the Colorado Securities Commission claims that the currency was not backed by almost anything — except the Word of God.
“Defendant Eli took advantage of the trust of potential investors,” the complaint states. “The success of their investments is guaranteed by God,” he said.
From the beginning, Regalados members insisted that INDXcoin was not a security offering, but instead a utility currency, and therefore exempt from securities regulations. According to legal filings, when several experts rejected the claim and told the Regalados that INDXcoin was actually a security offering, the pair tried to invoke a higher power than the currency. Amateur test.
“[We] “I wasted a lot of time trying to work with world experts,” Eli Regalado posted on a community forum for INDXcoin holders last May, according to the filing. “[They said] “What Eli and Kaitlyn are doing is a security, but God says, ‘No, it’s a utility coin.’”
INDXcoin could only be exchanged for US dollars through Kingdom Wealth Exchange, an exchange also controlled by the Regalados that Colorado regulators say routinely shuts down to avoid bank runs. When some investors began to worry about INDXcoin's lack of returns and considered cashing out entirely, Eli Regalado reportedly told them that God was telling them to… for him It is a must for everyone to HODL.
“The defendant also told the investors that God was telling him to tell the investors”[s]Ty where are you. Stay in INDXcoins. Stay where I tell you to go. “I'm going to make room,” the complaint says.
The Regalados eventually closed the Kingdom Wealth Exchange last year, after claiming there were not enough active “dealers” to keep it running. Afterwards, the couple informed INDXcoin holders that God had told them that everyone should continue investing in the coin, and not ask questions.
In the course of raising more than $3 million, the Regalados allegedly pocketed $1.3 million, which they spent on luxury handbags, cosmetic dentistry, snowmobile adventures, and Or a husbandHome renovations, luxury vacations and other items.
Decryption She reached out to the Regalados but did not immediately receive a response. in video Posted on INDXcoin Community website On Friday evening, Eli Regalado addressed the situation publicly for the first time.
“The charges are that Caitlyn and I were paid $1.3 million, and I just wanted to come out and say that those charges are true,” Regalado said. “But out of $1.3 [million]half a million dollars went to the IRS, and a few hundred thousand dollars went to the home remodeling that the Lord has commanded us to do.
Regalado also explained that when God approached him about creating INDXcoin, Regalado initially had concerns about the liquidity of the token — to which God, according to the pastor, responded, “Trust me.”
The couple is scheduled to face a hearing on January 29 on the Colorado Securities Commissioner's request for a preliminary injunction.
At the hearing, state officials will likely expand on arguments regarding how Regalados violated state securities laws. Whether prosecutors will be able to prove that God did it remains to be seen no Talking to Regalados about coins is another matter.
Edited by Andrew Hayward
