CNN
—
Denver pastor Eli Regalado had an exciting message for his congregation.
After months of prayers and cues from God, he was going to start selling cryptocurrency, he announced in a YouTube video last April. The Signature and Silvergate banks had collapsed weeks earlier, signaling the need to look into other investment options beyond financial institutions, he said. With divine wisdom, he said, he was “setting the rails for God’s wealth transfer.”
Shortly afterward, Regalado and his wife, Kaitlyn Regalado, launched a cryptocurrency, INDXcoin, and began selling it to members of his Victorious Grace Church and other Christian communities in the Denver area. They sold it through the Kingdom Wealth Exchange, an online cryptocurrency marketplace he created, controlled and operated.
The Regalados raised more than $3.2 million from over 300 investors, Tung Chang, Securities Commissioner for Colorado, said in a civil complaint.
The couple’s sales pitches were filled with “prayer and quotes from the Bible, encouraging investors to have faith that their investment … would lead to ‘abundance’ and ‘blessings,’” the complaint said.
But Colorado state regulators say that INDXcoin was “essentially worthless.” Instead of helping investors acquire wealth, the Regalados used around $1.3 million of the investment funds to bankroll lavish expenditures, including a Range Rover, jewelry, cosmetic dentistry and extravagant vacations, the complaint said. The money also paid for renovations to the Regalados’ Denver home, the complaint said.
In a stunning video statement posted online on January 19 — several days after the civil charges were filed — Eli Regalado did not dispute that he and his wife profited from the crypto venture.
“The charges are that Kaitlyn and I pocketed 1.3 million dollars, and I just want to come out and say that those charges are true,” he said, adding, “A few hundred thousand dollars went to a home remodel that the Lord told us to do.”
The Colorado Division of Securities started investigating the Regalados after it received complaints from an anonymous investor, a state spokesperson told CNN.
Chan filed civil fraud charges last week against the pastor and Kaitlyn Regalado, accusing them of violations of the anti-fraud, licensing and registration provisions of the state’s Securities Act.
CNN has reached out to the Regalados for comment. It was unclear Wednesday whether they have retained an attorney.
In video statements, Eli Regalado has said that God led him to open INDXcoin and convinced him that it was a safe and profitable investment venture.
He told investors that INDXcoins “were highly sought after and offered an unparalleled risk-to-return ratio,” the complaint said.
But the state says INDXcoin was not backed by assets, making it a risky currency. There was no market for it or interest in it beyond its pool of investors, the complaint said.
The Regalados used technical terms to confuse investors and misled them into believing that the coins were valued at between $10-$12 even though they were purchased for $1.50 or, at times, given away, the complaint said.
“Regalado took advantage of the trust and faith of his own Christian community and … peddled outlandish promises of wealth to them when he sold them essentially worthless cryptocurrencies,” Chan said in a statement.
The Regalados failed to explain to investors how the INDXcoin market would work or that their Kingdom Wealth Exchange was the only platform “upon which anyone could buy, sell, or trade the currency,” the complaint said.
When INDXcoin failed to yield financial returns, Eli Regalado posted videos reassuring investors and saying, according to the complaint, they just “had to wait for God’s plan to unfold.”
In his video last week, Regalado addressed the accusations and acknowledged that people who bought INDXcoin are stuck because they are unable to sell.
“We launched an exchange,” he said. “The exchange technology failed. Things went downhill. And from that point forward, we’ve just been waiting on the Lord.”
“I know this looks bad,” he said later in the clip. “I know this looks terrible.”
Regalado also said that he and his wife used about half a million dollars of their investors’ funds to pay taxes to the IRS.
He reiterated that God led him and his wife to leave their marketing company in 2021, get into cryptocurrency and multiply investors’ money. God told them to trust him to provide the funds, he said.
Investigators found that investors began sending money in June 2022 via Eli Regalado’s Venmo account or wire transfers, long before Regalado announced the launch of the trading platform in April.
It’s unclear when an investor first complained to state officials. In November, Regalado announced that the INDXcoin and Kingdom Wealth Exchange networks were down and asked people to “stop being ruled by mammon (chasing material wealth).”
As recently as last week, Eli Regalado expressed hope that divine intervention would bail out him and his investors.
“Either I misheard God … or God is still not done with this project, and He is going to do a new thing,” he said in the video posted January 19. “What we’re praying for, and what we’re believing for still, is that God is going to do a miracle. God is going to work a miracle in the financial sector … (and that) everyone (who invested) … is going to be able to receive money back.”
A court hearing is scheduled for Monday.
