A pastor and his wife have both been charged with fraud for allegedly creating a cryptocurrency, pitching it to Christian communities and using the proceeds to fund their “lavish lifestyle," authorities say.
Eli Regalado, a pastor in Denver, Colorado, and his wife, Kaitlyn Regalado, “created, marketed and sold a cryptocurrency known as the ‘INDXcoin’ to members of the Christian community,” according to a statement from the Colorado Division of Securities. “The INDXcoin was also offered through the Kingdom Wealth Exchange (KWE), an online cryptocurrency exchange that they created, controlled and operated.”
Colorado Securities Commissioner Tung Chan filed civil fraud charges on Thursday against Eligio (Eli) and Kaitlyn Regalado of Denver, along with the companies they used to allegedly sell the coins, for alleged violations of the anti-fraud, licensing and registration provisions of the Colorado Securities Act.
“According to the complaint filed by the Colorado Attorney General’s Office, investigators from the Colorado Division of Securities found that from June 2022 to April 2023, INDXcoin raised nearly $3.2 million from more than 300 individuals,” authorities said. “The complaint alleges that Regalado targeted Christian communities in Denver and claimed that God told him directly that investors would become wealthy if they put money into INDXcoin.”
The Colorado Division of Securities say that the Regalados had no experience in cryptocurrency “which was clear when a third-party auditor’s report allegedly described their INDXcoin code as unsafe, unsecure and riddled with serious technical problems.”
The Regalados, however, continued to promote the INDXcoin as a low-risk, high-profit investment when, according to the complaint against them, “the INDXcoin was illiquid and practically worthless” as their investors lost millions of dollars and the Regalados dissipated investor funds to support their “lavish lifestyle.”
“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,” said Commissioner Chan. “New coins and new exchanges are easy to create with open source code. We want to remind consumers to be very skeptical.”
The action, filed in Denver District Court, seeks preliminary and injunctive relief, damages for investors and for a constructive trust to be placed on the Defendants’ property.
The investigation into the Regalado’s dealings is currently ongoing and authorities are anyone who invested with INDXCoin or any of the Regalado’s other entities to contact the Colorado Division of Securities at dora_SecuritiesWebsite@state.co.us or 303-894-2320.