June 21, 2024

Colorado pastor accused in $3.2 million cryptocurrency fraud

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Pastor Eli Regalado and his wife, Kaitlyn, associated with the Victorious Grace Church in Denver, are facing a lawsuit from the Colorado Securities Commission. The pastor and his wife are alleged to have engaged in a crypto fraud involving the raising of $3.2 million through a cryptocurrency called INDXcoin.

The virtual currency was primarily marketed to members of Victorious Grace Church. Regalado claims to have received divine instructions for its creation. However, legal accusations indicate that the Regalados deceived investors by selling unregistered securities and manipulating the representation of INDXcoin.

Fraud accusations

Regalado and his wife asserted that INDXcoin was backed by a cryptographic index and substantial assets. In reality, the currency had minimal backing, and the couple justified it with divine backing, the commission said. Regalado allegedly made deceptive claims, assuring investors that their success was “guaranteed by God.”

Despite expert advice, Regalado insisted that INDXcoin was a utility coin, not a security. He and his wife controlled the only platform to exchange INDXcoin for USD, occasionally shutting it down. Misappropriation of funds is also part of the allegations. It is claimed that the Regalados used $1.3 million of the raised funds for personal expenses.

Among the supposedly incurred expenses were luxury items, vacations and home renovations. Regalado admitted to pocketing $1.3 million, justifying part of it as payments to the IRS and renovations ordered by God. In a recorded testimony, Pastor Eli Regalado tries to explain the situation.

A misunderstanding, says Regalado

The pastor attributes the crisis to a misunderstanding with another cryptocurrency. He claims to be awaiting a divine miracle to resolve the financial situation. The case is ongoing, and a hearing scheduled for Jan. 29 will address the request for a preliminary order, evaluating the violation of state securities laws and the legitimacy of the Regalados’ divine claims.

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