An online pastor in Colorado who claims he was following God’s guidance faces charges of civil fraud in the alleged sale of $3.2 million in bogus cryptocurrency that state regulators say is “practically worthless” to those who fell for the scheme.
A legal complaint filed last week by Colorado’s securities commissioner accuses Eligio Regalado and his wife, Kaitlyn Regalado, of scamming Denver’s Christian community with counterfeit digital currency that had been promoted under the trendy moniker INDXcoin.
Confronted with the charges, Eligio Regalado released a video statement saying that he might have “misheard” the divine instructions, leading to violations of Colorado’s anti-fraud, licensing and registration laws.
“The Lord said: I want you to build this,” Regalado claimed. “We took God at his word and sold a cryptocurrency with no clear exit.”
In a statement, state regulators claim the digital currency was marketed as a “low-risk, high-profit investment” when, in reality, the assets were undeclared and thus ineligible to be converted to cash through the typical means of a digital platform or trading exchange, rendering the coin “practically useless.”
“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.
The filing said more than 300 unwitting investors lost millions of dollars, which the Regalados used to sustain their extravagant lifestyle.
The couple allegedly sold the digital coin from June 2022 to April 2023.
Regalado claims he and his wife only raked in about $1.3 million from the sales and admitted to spending “a few hundred thousand dollars” on “a home remodel that the Lord told us to do.”
“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,” Regalado said.
The Colorado Securities Commissioner said the Regalados “had no experience in cryptocurrency,” which became clear after regulators found “a third-party auditor’s report allegedly described their INDXcoin code as unsafe, unsecure and riddled with serious technical problems.”
Regalado acknowledged he had no previous experience in trading cryptocurrencies but said he launched INDXcoin because God told him to.
“God is in the business of doing new things and breaking seals. And he did tell us to do this.”
“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. I don’t know what I’m doing. I don’t want to be caught up in something.”
Regalado blamed technical issues for his ordeal and denied that anything criminal had occurred.
“We launched an exchange. The exchange technology failed. Things went downhill,” the pastor said. “I know this looks terrible.”
The business venture sank in November, around the time Regalado said he had a mental breakdown due to signs the operation was failing, leading to demands from investors to get their money back.
