A pastor in Denver who said that God told him to sell cryptocurrency that could not be cashed is facing civil charges, along with his wife, for marketing a digital coin that prosecutors said was “practically worthless” and using the proceeds to support a “lavish lifestyle.”
The pastor, Eligio Regalado, and his wife, Kaitlyn Regalado, were charged on Thursday in a civil complaint filed in Denver District Court by the Colorado Attorney General’s Office, the Colorado Division of Securities said in a statement. The agency said that the couple created, marketed and sold a cryptocurrency that they called INDXcoin through a cryptocurrency exchange, which they also ran.
Prosecutors said that the couple, who had no experience in cryptocurrency exchanges, marketed the INDXcoin to Christians in Denver, and raised nearly $3.2 million from more than 300 people who bought it from June 2022 to 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 a lawyer.
In a video addressing the complaint last week, Mr. Regalado said that he did not want investors to be “mad” at the 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 exit.”
Mr. Regalado said that because of problems with the cryptocurrency exchange, investors could not take their money out.
Mr. Regalado also said in the video that he went into the cryptocurrency business because “the Lord” told him to. He said that God had once come to him a dream and asked him to do so, and he accepted that he and his wife spent the funds in “a home remodel that the Lord told us to do.”
Mr. Regalado said that he still hoped that investors could get their money back, and that he believed “God is going to work a miracle in the financial sector.”
Commissioner Tung Chan of the Colorado Division of Securities said in a statement that “Mr. Regalado took advantage of the trust and faith of his own Christian community.”
“He peddled outlandish promises of wealth to them when he sold them essentially worthless cryptocurrencies,” Ms. Chan said.
The Colorado Attorney General’s Office declined to comment, citing the ongoing litigation.
Mr. Regalado led the Victorious Grace Church, according to records. A website for the church had been taken down as of Tuesday. Mr. Regalado also said in the video that in 2021 “the Lord” told him and his wife to step away from a marketing company they were running to start a “new thing.”
Of the more than $3 million that the couple had raised through INDXcoin, Mr. Regalado said that 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 toward the home remodel.
About nine months ago, Mr. Regalado said, the undertaking “started falling apart,” adding that he didn’t know what he was doing.
“One of two things have happened,” Mr. Regalado said, “One: Either I misheard God and every one of you who prayed and came in, you as well, or two: God is still not done with this project and he’s going to do a new thing.”
Prosecutors said they were seeking damages to help restore losses to investors. Mr. Regalado said in the video that the couple planned to argue their case, and that their “goal” was for investors to get some of the money back.
