Pastor Charged With Cryptocurrency Fraud Said God Told Him to Do It

Pastor Charged With Cryptocurrency Fraud Said God Told Him to Do It

A Denver pastor who said God told him to sell cryptocurrencies that couldn’t be redeemed is facing civil charges along with his wife for marketing a digital coin that prosecutors say was “virtually worthless.” , and had used the proceeds to support a “lavish lifestyle.”

Pastor Eligio Regalado and his wife Kaitlyn Regalado were charged Thursday in a civil lawsuit filed by the Colorado Attorney General’s Office in Denver District Court, the Colorado Division of Securities said in a statement. The agency said the couple created, marketed and sold a cryptocurrency called INDXcoin through a cryptocurrency exchange they also operated.

Prosecutors said the pair, who had no experience with cryptocurrency exchanges, marketed the INDXcoin to Christians in Denver and raised nearly $3.2 million from more than 300 people who used it from June 2022 to April 2023 would have bought. Mr. Regalado and his wife then used the money for themselves, the Colorado Division of Securities said.

Mr. Regalado and Ms. Regalado did not immediately respond to requests for comment Tuesday. It was unclear whether they had an attorney.

In a video accompanying the complaint last week, Mr. Regalado said he didn’t want investors to be “angry” with prosecutors.

“You have to do this,” he said. “I mean, if you think about it, we sold a cryptocurrency with no clear way out. We made. We took God at his word and sold a cryptocurrency with no clear way out.”

Mr. Regalado said investors were unable to withdraw their funds due to issues with the cryptocurrency exchange.

Mr. Regalado also said in the video that he got into the cryptocurrency business because “the Lord” told him to. He said God once gave him a dream and asked him for it, and he accepted that he and his wife spent the money on “a home renovation that the Lord told us to do.”

Mr. Regalado said he still hoped investors could get their money back and he believed “God will work a miracle in the financial sector.”

Commissioner Tung Chan of the Colorado Division of Securities said in a statement: “Mr. Regalado tapped into the trust and faith of his own Christian community.”

“He made outlandish promises of wealth to them while selling them virtually worthless cryptocurrencies,” Ms Chan said.

The Colorado Attorney General’s Office declined to comment, citing ongoing litigation.

According to records, Mr. Regalado led Victorious Grace Church. A church website was closed on Tuesday. Mr. Regalado also said in the video that “the Lord” told him and his wife in 2021 to step away from a marketing company they were running to start a “new thing.”

Mr. Regalado said he and his wife pocketed about $1.4 million of the more than $3 million the couple raised through INDXcoin. About $500,000 of the money went to the Internal Revenue Service, and “several hundred thousand dollars” went toward renovating the home.

About nine months ago, Mr. Regalado said, the company began to “fail,” adding that he didn’t know what he was doing.

“One of two things happened,” Mr. Regalado said, “One: either I misunderstood God and every one of you who prayed and came in, you did too, or two: God is still not done with this project and he goes “do something new.”

Prosecutors said they are seeking damages to offset investors’ losses. Mr. Regalado said in the video that the couple planned to plead their case and that their “goal” was for investors to get some of the money back.

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2024-01-23 22:31:26