Eligio Regalado and his wife Caitlin say they followed God's will by trading cryptocurrencies. But Colorado officials say they were illegally enriched at the expense of investors.
The couple now faces civil charges for fraud. They allegedly violated Colorado Securities Act by setting up a cryptocurrency exchange and selling INDXcoin for millions of dollars without informing venture investors, according to a complaint filed earlier this month by Colorado Securities Commissioner Tung Chan.
"We allege that Mr. Regalado exploited the beliefs and beliefs of his Christian community and made wild promises of wealth while selling them essentially worthless cryptocurrency," Chan said in a Jan. 18 press release.
According to the New York Times, Eligio Regalado responded to the complaints in a video he shared with investors and supporters.
In the video, the Colorado Securities and Exchange Commission admits it was doing its job.
"You have to do it," he said, according to the New York Times. "I mean, if you think about it, we sell cryptocurrencies with no clear exit. We're done. We took him at his word and sold cryptocurrencies with no clear exit.
Regalado added that he hoped investors would get their money back and that God would "do a miracle in the financial sector."
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Why a Colorado pastor is selling cryptocurrency
Regalado said he and his wife opened a crypto exchange and started selling cryptocurrencies because God called them to take on this project. According to the Washington Post, they have no commercial experience.
According to Chan's complaint, the pair "raised nearly $3.2 million from more than 300 people" between June 2022 and April 2023. Investors were allegedly told that investing in INDXcoin was a "low risk, high reward" activity when in reality it was high. the danger
“The complaint alleges that INDXcoin is, in fact, illiquid and virtually worthless; Investors lost millions; and the defendants embezzled investors' funds to finance their lavish lifestyles," Chan said in a statement.
According to the New York Times, Regalado said in his video that he and Caitlin "raised about $1.4 million." Some of that went to taxes, but "several thousand dollars" went to renovating their home, he said, adding that God told them to do the renovations.
Regalada admitted that he and his wife knew the cryptocurrency exchange was not working properly. He described God as "not done" with the project.
"One of two things happened," Regalado said, according to the New York Times. "One: I have wronged God and all who pray and come, including you, or two: God has not finished this project and is about to do something new."
What will happen to Regalados?
The civil fraud lawsuit, filed in Denver District Court, seeks "an injunction and preliminary injunction, investor damages and constructive disposition of the defendant's assets in trust," the press release states.
According to the New York Times, Regalado said in his video that he shares the state's goal of returning money to investors, but he and his wife plan to enforce their position.