June 22, 2024

Pastor accused of $3.2M crypto scam says he ‘misheard God’

A Colorado-based online pastor, who prosecutors allege sold $3.2 million in fraudulent crypto to parishioners, claims that although God told him to do it, there might have been a misunderstanding.

“Either I misheard God, and every one of you who prayed and came in … Or two, God is still not done with this project,” said Eligio “Eli” Regalado in a video message after Colorado Securities Commissioner Tung Chan filed a fraud complaint last week.

But as far as Chan is concerned, they are indeed done. In the civil action filed in Denver District Court, state financial regulators allege that Regalado and his wife, Kaitlyn Regalado, “created, marketed and sold a cryptocurrency, known as INDXcoin, to members of the Christian community.”

They did so under the auspices of the newly created Kingdom Wealth Exchange for the express purpose of offering INDXcoin.

From June 2022 to April 2023, the Regalados allegedly convinced more than 300 people to invest a total of nearly $3.2 million, telling Christian communities in Denver that God had promised to make them wealthy if they invested.

Even after a third-party auditor deemed the coin’s code “unsafe, unsecure and riddled with serious technical problems,” the couple “continued to promote the INDXcoin as a low-risk, high-profit investment,” the securities commission said.

In truth, INDXcoin was “practically worthless” in addition to being illiquid. Investors lost millions as the couple used their ill-gotten proceeds “to support their lavish lifestyle,” prosecutors claim.

Regalado admitted to creating the crypto, as per God’s instructions, even though he and his better half had no idea how to manage cryptocurrency.

“The charges are that Kate and I pocketed $1.3 million, and I just want to come out and say those charges are true,” Regalado said. “But out of that $1.3 million, half a million went to the IRS, and a few hundred thousand went to a home remodel that the Lord told us to do.”

Somewhere in there, technical failings prevented the investors who bought INDXcoin from converting it to cash. It was all a big misunderstanding, Regalado explained.

“The Lord said: I want you to build this,” he added, kinda sorta taking responsibility for his actions but largely throwing God under the bus. “We took God at his word and sold a cryptocurrency with no clear exit.”

Chan said the deeds were all too human.

“We allege that Mr. Regalado took advantage of the trust and faith of his own Christian community and that he peddled outlandish promises of wealth to them when he sold them essentially worthless cryptocurrencies,” Chan said in a statement. “New coins and new exchanges are easy to create with open source code. We want to remind consumers to be very skeptical.”

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