A bizarre case that highlights the dark side of cryptocurrency has emerged in Colorado. A Denver-based online pastor is facing legal action after being accused of defrauding hundreds of investors out of more than $3 million and personally embezzling $1.3 million.
TLDR
- Pastor Eli Regalado sold a cryptocurrency called INDXcoin to his online church followers, promising a 10x return. He has now admitted that the charges against him are true.
- Regalado claims that God instructed him to launch INDXcoin and provide wealth to his followers through it. Half of the $1.3 million he and his partner withdrew reportedly went towards God-ordained taxes and home renovation costs.
- After the failure of cryptocurrency exchange Regalado, which launched in November 2022, investors had no way to cash out their currently worthless INDXcoins. Regalado said he still believes God can perform a “miracle” so investors can get their money back.
- Colorado securities regulators allege that Regalado targeted the Christian community and spent most of the funds raised on luxuries such as cars, vacations, purses and cosmetic dentistry for himself and his partners.
- It ceased operations in November 2022 after more than 300 investors invested a total of approximately $3.2 million in INDXcoin through Regalado’s Kingdom Wealth Exchange platform.
Eli Regalado, founder of the digital token INDXcoin and operator of the Kingdom Wealth Exchange platform used to sell it, acknowledged in a recent video statement that the charges brought against him and his partners by state securities regulators were valid. But Regalado also doubled down on his claim that his actions were ordained by God.
Regalado is the pastor of the online-only Victorious Grace Church. According to the civil suit filed Jan. 18 in Denver District Court, between June 2022 and April 2023, Regalado sold worthless INDXcoin to more than 300 investors, mostly members of his own congregation, for $3.2 million. We were able to raise funds close to .
Colorado Securities Director Tung Chan alleged that most of the funds were used to personally enrich Regalado and his partner, Kaitlin Regalado. Bank records show the couple indulged in luxury cars, vacations, expensive jewelry and accessories, dental work, and even spent more than $300,000 on remodeling their home. Regalado confirmed that he and Kaitlin withdrew a total of $1.3 million, about half going toward taxes and the remainder toward home remodeling as directed by God.
An online pastor has been indicted in Colorado on charges of $1.3 million cryptocurrency fraud. He released a 9-minute video explaining that “the Lord told me to sell cryptocurrency without a clear exit,” and used part of the proceeds to “remodel the house that the Lord told us to do.”
Here’s the supercut. pic.twitter.com/scKpF8nyrT
— Molly White (@molly0xFFF) January 21, 2024
In a video responding to the allegations, Regalado does not deny that he used a significant amount of money he collected from investors into his personal piggy bank. He claims that the idea came directly from Almighty God. Regalado says that giving tenfold in return for his flock is a special command sent directly from the Lord, and that their accumulation of material wealth is a means of entering heaven.
Both the INDXcoin digital token used to facilitate transactions and the Kingdom Wealth Exchange were shut down by Regalado in November 2022. This made the assets purchased by his followers essentially worthless overnight. The pastor said problems with the exchange software and lack of server finances left him with no choice. Investigators counter that it was a last-ditch attempt to cover his tracks as the investigation intensifies.
In another twist that adds insult to injury, according to the state’s complaint, Hacken, the cybersecurity auditor, gave INDXcoin the lowest possible rating of “0/10.” However, Regalado actively promoted positive reviews to reinforce perceptions of the token’s legitimacy. He said he prays that someday a divine miracle will happen for investors holding the bag and they will be made financially whole.
Regalado reveals the details for engineering these supernatural solutions, while also emphatically asserting that God is not done with INDXcoin yet. Supportive comments on his video statement indicate that some followers are still inclined to take his word for it. But regulators are having none of it, denouncing his scheme as a fraud from the start and saying he shamelessly exploited trust within the Christian community.
Currently, the pastor’s bank account and the bank accounts of related organizations are frozen according to court order. He and Kaitlyn are scheduled for a hearing on January 29 to answer to charges of violating securities laws. Time will tell whether God’s providence intervenes on their behalf. But investors probably shouldn’t hold their breath to recoup their $3 million cryptocurrency losses.