A Colorado-based online church pastor who allegedly made $1.3 million through a cryptocurrency fraud scheme told his followers in a video statement that God asked him to do it.
Eli Regalado and his wife marketed their cryptocurrency, INDXcoin, to Christian communities in Denver, saying God told him people would get rich if they invested, the Colorado Division of Securities said in a statement Thursday.
INDXcoin has raised nearly $3.2 million, the securities division said. At least $1.3 million of it went directly to the Regalados or was “used for their personal benefit,” a complaint filed Tuesday in Denver District Court said.
Eli and Kaitlyn Regalado could not be reached for comment, but in a video statement to his followers last week, Eli Regalado said the accusations that they were paid $1.3 million are “true.”
“Of the $1.3 million, half a million dollars went to the IRS, and a few hundred thousand dollars went to a house remodel that the Lord asked us to do,” he said in the video.
The couple also allegedly spent their investors’ money on a Range Rover, luxury handbags, jewelry, a babysitter, boat rentals and snowmobile adventures, according to the complaint.
The pair were charged with violating the anti-fraud provisions of the Colorado Securities Act.
Colorado Securities Commissioner Tong Chan told NBC News that she filed civil fraud charges after she was contacted by people who invested and lost money through INDXcoin.
“We allege that Mr. Regalado exploited the trust and faith of his Christian community, and that he peddled strange promises of wealth to them when he sold them worthless cryptocurrencies,” Chan said in a statement.
“Illiquid and practically worthless”
Regalado claimed that God told him that investors would become rich if they invested money in INDXcoin, as they promoted it as a low-risk, high-profit investment tied to the average value of the top 100 cryptocurrencies, the securities division said.
In fact, INDXcoin was “illiquid and practically worthless,” the Securities Division said in its statement. The cryptocurrency was only available on the Kingdom Wealth Exchange, which was closed by the Regalados family. It can no longer be sold anywhere.
“We took God’s word for it and sold cryptocurrency with no clear way out,” Regalado said in his video address on Friday. “What we believe so far is that God will perform a miracle. God will perform a miracle in the financial sector.”
In the comments on Regalado’s video, dozens of people continue to assure him that God will “turn things around.”
Marketing based on faith
Regalado was 22 years old and serving a prison sentence for “car boosting” when his faith called him to become a pastor 20 years ago, he said in a live YouTube broadcast. He began preaching at the online-only Victorious Grace Church, where he and his wife were listed as the only employees.
Despite having no background in cryptocurrencies or stock exchanges, Regalado said divine inspiration called him to launch INDXcoin and Kingdom Wealth Exchange.
“Last October (20)21, the Lord brought me this cryptocurrency. He said, ‘Take this to my people for wealth transfer,’” Regalado said in a video update to INDXcoin followers in August 2022.
Regalado advertised INDXcoin through presentations at his church and others he found through other pastors, according to the legal complaint. It said that from June 2022 to April 2023, the cryptocurrency raised approximately $3.2 million by selling unregistered securities.
In videos on the INDXcoin YouTube channel, Regalado quotes Bible verses and tells investors to expect a “miracle” as they wait for “God’s plan” to unfold.
Regalado also told investors they would “pay tithes” and “sow” to causes helping widows and orphans, but the money went primarily into their own pockets, according to the complaint.
“They’re specifically going to the Christian community, and there’s a lot of references to the Bible and faith. He’s covering it up to get people to give him their money,” said Chan, the Colorado Securities Commissioner. “It’s really heartbreaking for the people who trusted him. “
Eli Regalado, his wife and three companies are charged with securities fraud, unlicensed brokerage activities, selling unregistered securities and imposing a constructive trust.
They are scheduled to appear in Denver District Court next week, according to the court docket.
Chan urges others who have invested in INDXCoin to contact the Colorado Division of Securities.