Pastor accused of cryptocurrency fraud says God told him to do it

A Denver pastor who said God told him to sell cryptocurrency that could not be cashed in is facing criminal charges along with his wife for marketing a digital currency that prosecutors said was “practically worthless” and using the proceeds to support a “lavish organization.” lifestyle.”

The pastor, Eligio Regalado, and his wife, Kaitlyn Regalado, were charged Thursday in a civil complaint filed in Denver District Court by the Colorado Attorney General's Office, Colorado Division of Securities. said in a statement. The agency said the couple created, marketed and sold a cryptocurrency they called INDXcoin through a cryptocurrency exchange, which they also operated.

Prosecutors said the couple, who had no experience exchanging cryptocurrency, marketed INDXcoin to Christians in Denver and raised nearly $3.2 million from more than 300 people who bought it between June 2022 and April 2023. Mr. Regalado and his wife then used the money for themselves, the Colorado Division of Securities said.

Mr. Regalado and Ms. Regalado did not immediately respond to requests for comment on Tuesday. It was unclear whether they had an attorney.

In a video in which the complaint is addressed last week, Mr. Regalado said he did not want investors to get “angry” with prosecutors.

“They have to do this,” he said. “I mean, if you think about this, we sold a cryptocurrency with no clear exit. We did. We took God at his word and sold a cryptocurrency with no clear way out.”

Mr Regalado said investors were unable to withdraw their funds due to issues with the cryptocurrency exchange.

Mr. Regalado also said in the video that he went into the cryptocurrency business because “the Lord” told him to. He said God once came to him in a dream and asked him to do so, and he accepted that he and his wife had spent the money on “a renovation of the house that the Lord had commanded us to do.”

Mr. Regalado said he still hoped investors would get their money back, and that he believed “God is going to work a miracle in the financial industry.”

Commissioner Tung Chan of the Colorado Division of Securities said in a statement that “Mr. Regalado benefited from the trust and faith of his own Christian community.”

“He made them bizarre promises of riches as he sold them essentially worthless cryptocurrencies,” Ms Chan said.

The Colorado attorney general's office declined to comment, citing ongoing litigation.

According to records, Mr. Regalado led Victorious Grace Church. A church website was taken offline on Tuesday. Mr. Regalado also said in the video that “the Lord” told him and his wife in 2021 that they needed to step away from a marketing company they were running to start something “new.”

Of the more than $3 million the couple raised through INDXcoin, Mr. Regalado said he and his wife pocketed about $1.4 million. About $500,000 of the money went to the Internal Revenue Service, and “a few hundred thousand dollars” went to renovate the house.

About nine months ago, Mr. Regalado said, the business “began to fall apart,” adding that he didn't know what he was doing.

“One of two things has happened,” Mr. Regalado said, “One, either I misunderstood God and each of you who prayed and came in, you too, or two, God is still not done with this project and he is about doing something new.”

Prosecutors said they were seeking damages to restore losses to investors. Mr. Regalado said in the video that the couple planned to plead their case, and that their “goal” was for investors to get some of the money back.