An online pastor and his wife’s foray into cryptocurrency has led to significant legal and financial fallout. Eligio “Eli” Regalado and Kaitlyn Regalado were recently ordered to pay $3.4 million in restitution for committing securities fraud in Colorado. This ruling followed a three-day bench trial held in May and was announced on September 12, highlighting the couple’s questionable practices with investments from their followers.
The Regalados launched a digital asset named INDXcoin from June 2022 until April 2023, claiming to have raised $3.4 million from more than 300 investors. Their approach relied heavily on misrepresentations, targeting Christian communities in Denver to attract funds. Notably, despite having no expertise in cryptocurrency, the Regalados promised their investors a “low-risk, high-profit investment.” An auditor’s evaluation cast serious doubt on these claims, revealing an alarming security code score of 0 out of 10.
The couple even created an online exchange, the Kingdom Wealth Exchange, where they claimed these digital assets could be traded. However, this venture collapsed almost immediately, after just one day of trading. In a video posted on YouTube, Eli Regalado admitted to pocketing a large sum of the investments, saying, “the charges are that me and Kaitlyn pocketed $1.3 million … I just wanted to come out and say those charges are true.”
Beyond the admission, both Regalados allegedly used investor funds to support a lifestyle filled with luxury. Reports indicate they enjoyed high-end jewelry, ski trips, and designer clothing, even financing home renovations and settling tax debts with the money they took from their followers. This blatant misuse of funds exemplifies a troubling trend where those in positions of trust exploit their relationship with their community for personal gain.
Colorado Securities Commissioner Tung Chan characterized the Regalados as “21st century false prophets.” He remarked on their actions, stating, “The Regalados leveraged the new and promising technology of cryptocurrencies to run an old-fashioned scam, victimizing their own congregants and others.” Chan also emphasized the vital role of state regulators, noting that such cases underscore the importance of protecting small investors—individuals striving to meet their daily needs and secure their futures.
As Chan pointed out, the burgeoning cryptocurrency market, now worth over $4 trillion, comes with its own set of risks and criminals looking to take advantage of unsuspecting investors. With fraud cases hitting closer to home, the vigilance of regulators becomes increasingly essential in ensuring justice is served.
The reaction to the Regalados’ case is a reminder of the potential for corruption in faith-based settings, where individuals may be particularly susceptible to manipulation. As this situation continues to unfold, it raises questions about accountability and the responsibilities of those who claim to lead others in financial and spiritual matters.
This case serves not only as a cautionary tale for investors but also highlights the urgent need for regulatory oversight in the ever-evolving world of cryptocurrency. The Colorado Securities Division’s efforts to prosecute such fraud are a critical step in restoring trust and ensuring that genuine cryptocurrency projects can thrive in a fair marketplace.
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