US pastor’s $5m crypto scam: ‘I got advice from the Lord’

By and republished with permission

A Colorado pastor for an online church who is accused of defrauding investors of more than $3.2 million (NZ$5 million) through a cryptocurrency marketplace he ran with his wife says “the Lord” helped him orchestrate the venture.

Colorado’s securities commissioner filed civil fraud charges against Eli Regalado and his wife Kaitlyn Regalado, saying the Denver couple targeted the Christian community and told followers that God would make them rich if they invested in a cryptocurrency he created called INDXcoin.

Investigators with the Colorado Division of Securities found that from June 2022 to April 2023, INDXcoin raised about $3.2 million (NZ$5 million) from more than 300 people who invested in the “illiquid” and “essentially worthless” currency, according to the complaint filed on January 16.

Investigators said the Regalados — who ran a cryptocurrency marketplace called the Kingdom Wealth Exchange — used at least $1.3 million (NZ$2.1 million) of those funds to support a lavish lifestyle that included tens of thousands of dollars spent on vacations, jewellery, luxury handbags, cosmetic dentistry, clothes and home renovations. The two, who shut down the exchange on November 1, also are accused of using some of the money to finance the purchase of a Range Rover.

Eli Regalado did not respond to an email seeking comment Tuesday but, In a video statement to his followers last week, he said the charges that he and his wife pocketed the money “are true”.

“Out of that $1.3 (million), half a million dollars went to the IRS, and a few hundred thousand dollars went to a home remodel that the Lord told us to do,” he said in the video, noting that God appeared to him in a dream and gave him advice on how to run the cryptocurrency exchange.

“What we’re praying for, and what we’re believing for still is that God is going to do a miracle,” he added. “God is going to work a miracle in the financial sector. He’s going to bring a miracle into INDXcoin. Everyone that has come in for money is going to be able to receive money back,” said Regalado, who preaches for the online-only Victorious Grace Church.

The church, which counts the Regalados as its only two employees, is operated from the couple’s house, their recreational vehicle and their vacation destinations, according to investigators.

The Regalados’ presentations to fellow pastors and evangelical Christians promoting INDXcoin were dominated by prayer and quotes from the Bible that encouraged potential investors to have faith that the cryptocurrency would lead to “abundance” and “blessings”, investigators said.

In an August 2022 update video for his investors and followers, Eli Regalado stated: “The Lord brought this cryptocurrency to me. He said ‘Take this to my people for a wealth transfer.’ It has been confirmed a hundred times since then.”

The couple also told investors they would “tithe” and “sow” in causes that helped widows and orphans, “but the payments to ‘widows and orphans’ were primarily to the Regalados”, according to the complaint.

The Regalados, who had no previous experience selling cryptocurrency, are accused of violating the anti-fraud, licensing and registration provisions of the Colorado Securities Act.

They are set to appear in court on January 29.

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