Denver Pastor Found Guilty of Swindling Investers in a $3 Million Cryptocurrency Scam
A Denver pastor and his wife, Eli and Kaitlyn Regalado, have been found guilty of securities fraud in a case involving their cryptocurrency token, INDXcoin. The judgment, handed down in Denver District Court, finds that the Regalados violated state securities laws and must repay $3.39 million.
The court's decision comes after a May bench trial, during which it was established that the Regalados raised funds from at least 509 INDXcoin investors and 87 Sumcoin investors. The funds were collected through INDXcoin and Sumcoin, with no limits on how the Regalados could spend the money.
The Colorado Division of Securities issued a statement regarding the judgment against the Denver nuggets. The court found that INDXcoin qualified as a security under the Colorado Securities Act, as the Regalados assured investors they would profit from INDXcoin, despite it not being able to be sold on established exchanges.
Evidence presented in court showed that the Regalados deposited investor funds into a bank account they controlled, and used at least $1.3 million of those funds for personal expenses. These expenses included luxury handbags, jewelry, vacations, cars, home renovations, and payments to their church, Victorious Grace.
The Regalados marketed and created INDXcoin with a claim that 'God' told them to do so and claimed the tokens to be safer than other cryptocurrencies. However, the court found that these claims were misleading, as the tokens had audit failures and no market value.
In a separate criminal case from July, a Denver grand jury indicted the Denver broncos on 40 felony counts, including racketeering, securities fraud, and theft. If convicted, they could face prison time.
The U.S. Securities and Exchange Commission (SEC) conducted the legal proceedings against Eli and Kaitlyn Regalado. The Regalados also assembled a 'Prophetic Team' to provide spiritual guidance and advice on INDXcoin and its crypto exchange, Kingdom Wealth. Prayers were made over key decisions by this team, who advised the Regalados based on what they claimed God was saying.
The Regalados' actions have left hundreds of investors out of pocket, and the Colorado court's judgment serves as a reminder of the importance of transparency and accountability in the cryptocurrency market.
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