Denver pastor barred from selling crypto, ordered to pay back $3.4M

Eli Regalado an online pastor in Denver who made international headlines when his supposedly God-inspired cryptocurrency failed has been barred along with his wife from selling crypto or other investments for the next years The couple has also been ordered to repay million The defendants lack of understanding of the harm they have caused to their investors coupled with their admitted desire to continue and expand the INDXcoin scheme leads the court to conclude that a ban on selling is appropriate Judge Heidi Kutcher wrote Friday The Regalados face criminal counts of theft fraud and racketeering related to the sale of INDXcoin but Kutcher s ruling came in a civil matter that the Colorado Division of Securities brought against the pair and their friend Nathanael Enos who also sold INDXcoin Enos of Colorado Springs also received a -year ban and must repay On behalf of all INDXcoin holders our heavenly Father in whom we serve will deliver us Eli Regalado reported by email Monday quoting from the Bible Now when Daniel knew that the document was signed he entered his house and he continued kneeling on his knees three times a day praying and giving thanks before his God as he had been doing previously Eli and Kaitlyn Regalado are experienced marketers who created INDXcoin in They sold million in coins and spent million of that on personal expenses The Regalados are st-century false prophets who leveraged the new and promising instrument of cryptocurrencies to run an old-fashioned scam victimizing their own congregants and others Tung Chan the state s securities commissioner noted in a message Monday The court s holding is a win for Colorado investors for justice and fair play and for every legitimate cryptocurrency project out there We are proud to be part of this work Chan disclosed The central promise of INDXcoin was that its value would be indexed Take the price of the majority valuable cryptocurrencies add them up divide by and you would have the price of one INDXcoin When Kingdom Wealth Exchange the online marketplace where INDXcoin was bought and sold opened the indexed value was about the Regalados have announced But INDXcoin did not have anywhere near enough liquidity to rebuy at the coins it had sold for or So one unidentified trader in Canada made a flurry of sales drained the liquidity and forced the exchange to close in INDXcoin hasn t been sold since The defendants assertions of the value of INDXcoin were misleading at all points of the offering merely ascribing an algorithmic value to a coin does not make it worth that Kutcher wrote last week The coin was never going to be worth what the algorithm stated Rather than coming clean defendants then made multiple posts and communications to their investors assuring them that the exchange would come back online and that each investor would be able to sell their coin she added Defendants knew this was not true During a three-day civil trial in May the Regalados maintained that they could not have committed securities fraud because INDXcoin is not a safety and that fellow Christians bought INDXcoin to join in religious fellowship not as a financial assets Our whole focus in this trial is to show how terrible and inconsistent and absolutely amateur this Division of Securities examination was Eli Regalado mentioned in his opening message Related Articles Denver pastor wife indicted in million cryptocurrency scam Unmitigated greed Judge orders Colorado crypto pastor s bank accounts frozen Denver crypto pastor touted his currency at Zambian church conference instead of attending court hearing Denver pastor pocketed M selling worthless cryptocurrency state says We didn t defraud people we didn t scam people we re not predators we re not full of greed Kaitlyn Regalado revealed in her own remarks A great number of people got saved by this project But Kutcher determined that INDXcoin is a shield and its purchasers were misled by Enos and the Regalados who never notified investors that they would be spending much of the sale proceeds on themselves thereby dooming the Kingdom Wealth Exchange to insolvency Throughout the proceedings Mr Regalado offered this quote I will put the key of David on his shoulder What he opens no one will shut Kutcher recalled from the trial and the pastor s use of a passage from Isaiah Mr Regalado related this quote to overcoming challenges The quote seems apt but for different reasons Here the Regalados used INDXcoin to open up a revenue stream and then closed that revenue to others when they closed Kingdom Wealth Exchange leaving hundreds of people without a door to retrieve their stake Get more Colorado news by signing up for our daily Your Morning Dozen email newsletter