A Colorado pastor and his wife have been charged with duping hundreds of local Christians in a multimillion dollar cryptocurrency scheme.
Prosecutors accuse pastor Eli Regalado and his wife, Kaitlyn, of fraudulently raising over $3 million (£2.4m) by selling “practically worthless” crypto.
The Regalados pocketed at least $1.3m in the alleged scheme between June 2022 and April 2023, prosecutors say.
Regalado said his plan was inspired by God, according to court filings.
The pastor said that “God told him directly that investors would become wealthy” by investing into INDXcoin, a cryptocurrency created, marketed, and sold by the Regalados, according to the complaint.
INDXcoin was offered to Denver-area Christians through the Kingdom Wealth Exchange, an online cryptocurrency exchange owned and operated by the Regalados.
The couple “had no experience in cryptocurrency”, the complaint said, and a third-party auditor found INDXcoin to be “unsafe, unsecure and riddled with technical problems”.
“Despite that report, the Regalados allegedly continued to promote the INDXcoin as a low-risk, high-profit investment,” it said.
“In reality, the INDXcoin was illiquid and practically worthless” and the couple used the funds for “their lavish lifestyle”.
This included a Range Rover, luxury handbags, jewellery, boat rentals and snowmobile adventures, according to officials.
Colorado Securities Commissioner Tung Chan has filed civil fraud charges for violations of anti-fraud protections under the Colorado Securities Act.
She said her department was tipped off after multiple complaints by people who had invested in INDXcoin and had lost money.
Relagado addressed the allegations in a video statement released on Friday.
“The reason that [Colorado] is saying that it’s worthless is because there is no exit for people who have bought,” he said, acknowledging that the cryptocurrency investors who have tried to withdraw funds have been unable to.
“We launched an exchange. The exchange technology failed. Things went downhill, and from that point forward, we’ve just been waiting on the Lord literally for a miracle.”
On the allegation that Relagado and his wife received $1.3 million, the pastor said that was true.
“But out of that $1.3 million, half of it went to the IRS and $200,000 went to a home remodel that the Lord told us to do,” he said.
Many viewers left words of encouragement in the comments on the video, including “prayers going up” and “hang in there, stay strong”.
The BBC has reached out to the Regalados for comment.
In the criminal complaint, Colorado prosecutors have asked for preliminary and injunctive relief, damages for investors and for a constructive trust to be placed on the Relagados’ property.
They are scheduled to appear in Denver District Court next week. (BBC)
