- Pastor Eli Regalado said he was under God's orders to set up his failed crypto project and he's now counting on a miracle.
- He said it's true that he and his wife took $1.3 million from the investors, and that God told them to spend hundreds of thousands to remodel their home.
- He'll have a chance to start explaining that beginning with a court hearing scheduled for January 29.
To err is human. But Colorado securities officials said that what Pastor Eli Regalado has been doing is more like fraud.
Regalado and wife Kaitlyn launched a crypto token last year called INDXcoin. Colorado Securities Commissioner Tung Chan filed charges last week against the couple and the entities they ran, accusing them of pocketing $1.3 million in crypto proceeds while more than 300 investors had no way to recover any of their money.
The pastor – who had worked in digital marketing – responded in a video message posted on the project's website, sharing a sentiment that's unusual from a crypto founder cornered by government authorities: "Those charges are true."
"We sold a cryptocurrency with no clear exit," he said, explaining that God told him to build it and give investors ten times the money they put in. "We did. We took God at his word."
"The Lord told us to walk away from our parking company. ... He took us into this cryptocurrency ... well, that cryptocurrency turned out to be a scam.... And I said Lord ... you told me to do this," he said in the video.
The couple also took about $1.3 million from more than $3 million raised for the project. Regalado said about $500,000 went to the Internal Revenue Services, and a "few hundred thousand" was devoted to a home remodeling project that "the Lord told us to do."
The pastor, described in the token's white paper as an "ordained Marketplace Minister of the Gospel of Jesus Christ," said he insisted to God before the project began, "I don't have any experience in this industry. I don't know what I'm doing."
He and his wife launched the Kingdom Wealth Exchange, and investors began pouring money in.
"The exchange technology failed; things went downhill," he said. "We've just been waiting on the Lord, literally, for a miracle."
At this point, according to Colorado officials pursuing the charges in Denver District Court, the crypto is "Illiquid and practically worthless."
"We allege that Mr. Regalado took advantage of the trust and faith of his own Christian community and that he peddled outlandish promises of wealth to them when he sold them essentially worthless cryptocurrencies," Chan said in a statement.
A hearing is scheduled in the case on January 29, according to a search of the Colorado state court docket.
Most of the comments posted on the INDXcoin site are supportive of the pastor, quoting biblical passages and praising the way he's handling the accusations.
"We were just always under the impression that God was going to provide, that the source was never ending," Regalado said, granting that he knows this situation "looks terrible" and that he doesn't know what's coming next. "I don't know how God is going to turn this around."
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But he asserted, "God is not done with INDXcoin."
