Colorado Pastor Accused of Defrauding Investors in Cryptocurrency Scheme

Eli Regalado, a pastor for an online church in Colorado, and his wife, Kaitlyn Regalado, are facing civil fraud charges filed by the Colorado securities commissioner. The couple is accused of defrauding investors of over $3.2 million through a cryptocurrency marketplace they ran called the Kingdom Wealth Exchange. The Regalados targeted the Christian community, telling followers that investing in their cryptocurrency, called INDXcoin, would make them rich with the help of God. However, investigators found that INDXcoin was “illiquid” and "essentially worthless."

From June 2022 to April 2023, the Regalados raised about $3.2 million from more than 300 people who invested in INDXcoin. The funds were allegedly used to support the couple's lavish lifestyle, including expensive vacations, jewelry, luxury handbags, cosmetic dentistry, clothing, and home renovations. They also used some of the money to purchase a Range Rover. The couple shut down the Kingdom Wealth Exchange on November 1, 2023.

In a video statement to his followers, Eli Regalado admitted that the charges of pocketing the money were true. He claimed that out of the $1.3 million, half a million dollars went to the IRS, and a few hundred thousand dollars were used for a home remodel that he said God instructed them to do. Regalado stated that God appeared to him in a dream and provided guidance on how to run the cryptocurrency exchange. He expressed belief that God would work a miracle in the financial sector and that everyone who invested in INDXcoin would receive their money back.

The Regalados promoted INDXcoin to fellow pastors and evangelical Christians, using prayer and Bible quotes to encourage potential investors to have faith in the cryptocurrency. They also promised to tithe and sow in causes that helped widows and orphans, but the payments were primarily made to themselves.

Eli Regalado, who preaches for the online-only Victorious Grace Church, operated the church from his house, recreational vehicle, and vacation destinations. The couple had no previous experience selling cryptocurrency and are now facing charges of violating anti-fraud, licensing, and registration provisions of the Colorado Securities Act. They are scheduled to appear in court on January 29.

Colorado Securities Commissioner Tung Chan filed the charges after being approached by individuals who had invested and lost money through INDXcoin. She stated that Regalado took advantage of the trust and faith of his Christian community by making outlandish promises of wealth with essentially worthless cryptocurrencies. Chan described the situation as heartbreaking for those who trusted him.

Regalado, who claims that God told him to launch INDXcoin, marketed the cryptocurrency through presentations at his church and others he found through fellow pastors. He quoted Bible verses in videos, assuring investors that a miracle was coming. However, the Securities Division found that INDXcoin was illiquid and practically worthless.

The Regalados and their three companies are charged with securities fraud, unlicensed broker-dealer activity, selling unregistered securities, and imposition of constructive trust. The couple plans to argue their case in court and explain their actions. The Colorado Division of Securities is urging others who have invested in INDXcoin to come forward.