An online pastor in the United States has been charged with civil fraud for selling a cryptocurrency that regulators described as “practically worthless”.
According to CBS News, Colorado’s securities commissioner filed a legal complaint against Eligio Regalado and his wife Kaitlyn Regalado last week. The complaint accuses the couple of raising $3.2 million by targeting the state’s Christian community with the cryptocurrency, marketed as INDXcoin. They allegedly sold the “practically worthless” tokens from June 2022 to April 2023 through a cryptocurrency exchange they created called Kingdom Wealth Exchange, the complaint said.
The sales supported the couple’s “lavish lifestyle,” Colorado Securities Commissioner (CSC) Tung Chan said in a statement, as per the outlet. “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,” Mr Chan added.
Cryptocurrency is usually able to be converted into cash or other currencies through a digital platform or trading exchange. However, investigators alleged that INDXcoin was actually “illiquid and practically useless”. They also accused the couple of violating Colorado’s anti-fraud, licensing and registration laws.
On Friday, in a video message, the pastor acknowledged that the allegations that he made $1.3 million from investors “are true”. “We took God at his word and sold a cryptocurrency with no clear exit,” Mr Regalado said, as per the Washington Post. He added that he had also been divinely instructed to abandon his former business to take over INDXcoin.
“I’m like, well, where’s this liquidity going to come from,’ and the Lord says, ‘Trust Me,” the pastor said. “We were just always under the impression that God was going to provide that the source was never-ending,” he added.
Mr Regalado also said that he will go to the court to address the allegations against him and his wife. “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,” he said.
According to CSC, the Regalados had no prior experience operating a cryptocurrency exchange or creating a virtual token before minting INDX two years ago. But the pastor said he was inspired to sell INDXcoin because “God is in the business of doing new things and breaking seals. And he did tell us to do this”.
Investors who purchased INDXcoin were subsequently unable to convert the cryptocurrency into cash because of technical failings, Mr Regalado said. “We launched an exchange. The exchange technology failed. Things went downhill,” the pastor said. “I know this looks terrible,” he added.
Meanwhile, according to CSC, almost anyone can create a cryptocurrency token. “New coins and new exchanges are easy to create with open source code. We want to remind consumers to be very skeptical,” Mr Chan said.