A Colorado-based online pastor is facing fraud charges after allegedly pocketing $1.3 million from a cryptocurrency scheme he sold to his followers that raised nearly $3.2 million.
Eligio “Eli” Regalado and his wife, Kaitlyn Regalado, were named on a legal complaint filed to Colorado’s securities commissioner last week, accusing the couple of violating the anti-fraud, licensing and registration provisions of the Colorado Securities Act.
The complaint alleges, among other grievances, that the Regalados targeted a devout Christian community and sold an “unsafe” and “unsecure” product using Eli’s religious position to do so.
Investors, who were told God had a direct hand in the crypto, have since lost millions, according to the securities commissioner.
The Regalados first began selling their cryptocurrency, called INDXcoin, to the Denver Christian community in June 2022, raising nearly $3.2 million from more than 300 individuals by April 2023, according to a statement released by the Colorado Division of Securities Thursday.
The couple not only marketed the currency, which was called “illiquid” and “practically worthless” in the legal complaint, to their parishioners but also sold it only through Kingdom Wealth Exchange (KWE), an online cryptocurrency platform that they “created, controlled and operated.”
Part of this marketing was telling followers and potential investors that God had spoken directly to Eli and told him to create the crypto and that investors would become wealthy, a claim Regalado doubled down on in a recent video addressing his followers.
“The Lord said: I want you to build this,” he said in the message. “We took God at his word and sold a cryptocurrency with no clear exit.”
He also went on to assure followers his trust in God had not faltered and he believes divine intervention is still to come, saying: “Either I misheard God, and every one of you who prayed and came in — you as well. Or two, God is still not done with this project.”
In the video, Eli also confirmed that $1.3 million of the money went into his own pockets, some of which he and his wife used for a home remodel.
“Out of the $1.3 [million], half a million dollars went to the IRS, and a few hundred thousand dollars went to a home remodel the Lord told us to do,” he said.
The legal complaint alleges that the Regalados spent the money on more than just God’s word, accusing the couple of maintaining a “lavish lifestyle,” which included the purchase of a Range Rover, luxury handbags, jewelry, an au pair, boat rentals and snowmobile rides, while investors lost large sums in what they were told was a “low risk, high-profit investment” ordained by God.
“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,” Colorado Securities Commissioner Tung 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.”
Regalado, who has no prior experience in the financial or crypto sectors, said in the video that their planned exchange technology failed due to technical issues, making it impossible for investors to cash out. He likewise admitted that he had doubts about starting INDXcoin in the first place.
“I said: Lord, I don’t want to do this. I don’t know how to do this. I don’t have any experience in this industry,” said Eli. “I don’t know what I’m doing. I don’t want to be caught up in something.”
Still, dozens of followers commented beneath the clip, reassuring the pastor that they believed God would find a solution for him yet.
“What we’re believing for still is that God is going to do a miracle,” Regalado’s video said. “God is going to work a miracle in the financial sector.”
In the meantime, the Colorado Division of Securities is asking anyone who has invested in INDXcoin or any other of Regalado’s other businesses to contact them.
Eli and Kaitlyn Regalado and three companies under Eli’s name are charged with securities fraud, unlicensed broker-dealer activity, selling unregistered securities and imposition of constructive trust. They are scheduled to appear in Denver District Court next week.
