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A Colorado pastor and his wife are being accused of selling "virtually worthless" cryptocurrency.
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Eli Regalado said many of the accusations were true but insisted they were a result of his inexperience.
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Regalado also said that the Lord told him to use funds from investors to remodel his house.
A Colorado pastor facing civil fraud charges related to his cryptocurrency business admitted to pocketing $1.3 million, but says he used some of it for a biblically ordained person. house remodeling.
Eli Regalado and his wife, Kaitlyn Regalado, are being sued in Denver District Court by Colorado Securities Commissioner Tung Chan, who accused the couple of attacking Christians to invest in your cryptocurrency INDXcoin, despite being โillequitous and virtually worthless,โ according to a press release from the Colorado Department of Regulatory Agencies.
Local point of sale BusinessDen first reported on the lawsuit on Thursday.
"We allege that Mr. Regalado took advantage of the trust and faith of his own Christian community and that he sold them extravagant promises of wealth when he sold them essentially worthless cryptocurrencies," Chan said in a Press release. "It is easy to create new coins and new exchanges with open source code. We want to remind consumers to be very skeptical."
The lawsuit seeks to recover losses Chan claims the investors incurred and have a constructive trust placed in the remodeled home, a judicial remedy for those found liable for unjust enrichment.
In a Friday response on the INDXcoin website, Regalado addressed the lawsuit, saying it was true that they had 'sold a cryptocurrency without a clear exit,' but claimed that God directed it and that mistakes were made due to inexperience. Regalado also pointed out that his goal was to recover investors' money.
"So the charges are that Kaitlyn and I pocketed $1.3 million, and I just want to come out and say those charges are true," Regalado said in his video address. "So $1.3 million has been withdrawn, I think it was a total of 3.4 million. But of that 1.3, half a million dollars went to the IRS and a few $100,000 was for a house remodel that the Lord told us to do." do."
The Regalados declined to comment to Business Insider.
A cryptocurrency investment better than the sky
Regalado operates Victorious Grace Church online, which has no physical location. In August 2022, he came to his congregation via video call to deliver a message that the Lord had commanded him to delve into cryptocurrencies, according to court documents obtained by Business Insider. He and his wife founded INDXcoin and Kingdom Wealth Exchange, a platform for buy and sell cryptocurrencies.
โIt was last October 21 that the Lord brought me this cryptocurrency,โ Regalado told his congregation via video broadcast, according to court documents. "He said 'take this to my people for a wealth transfer.'"
Chan writes in the complaint that Regalados sold nearly $3.4 million in cryptocurrency in 2022 and part of 2023. According to the complaint, the pair assured potential investors that INDXcoin was "more secure than other coins."
Chan writes in the lawsuit that about 30 million coins were in circulation, sold for $1.50 a coin, with the promise that each coin was worth at least $10. The Regalados had, at most, $30,000 backing the coins, far less than the $300 million in assets they should have had.
Regalado explained why he valued the coins at 10 times the amount: The Lord told him so.
โIf someone bought $1,000 worth of INDXcoin, we would basically give them $10,000 worth of INDX, so 10 times more,โ Regalado said. "And I say, 'Where will this liquidity come from?' and the Lord says: 'Trust in me.'"
According to the complaint, Kingdom Wealth Exchange and INDXcoin eventually closed in November 2023 because they had no available liquidity.
The Regalados assured investors worried about their money that it would soon arrive.
"Stay with INDXcoins...just take that word as gospel truth and run with it and don't worry about how the money will happen. I truly believe you will see a miracle in a very short time," Regalado told investors in a video call, according to the demand.
However, the Regalados had pocketed at least $1.3 million in investor money to spend on luxurious objects, cosmetic dentistry procedures, an au pair, home renovations and boat and snowmobile rentals, according to financial records cited by Chan's office. The couple also used funds from investors to finance a Range Rover and pay off a loan on a Ford F-150.
According to court documents, an additional $290,000 was sent to their online church, of which the couple is the sole beneficiary. The lawsuit claims the Regalados told investors they were investing this money in charitable causes.
"Defendants ensured that investors would never get their funds back because they took the investment money for their own benefit," the lawsuit reads.
Judge David Goldberg, who is overseeing the civil case against the Regalados, ordered that their bank accounts be frozen for 14 days and that the couple stop selling securities in the state while the case continues.
The couple has an upcoming hearing on January 29.
Read the original article at Business Insider
