TechFlow, September 17 — According to Decrypt, a Colorado court ruled against Denver pastor Eli Regalado and his wife Kaitlyn Regalado, ordering them to pay $3.39 million in damages for defrauding hundreds of investors by selling church-backed cryptocurrency tokens in violation of state securities laws.
The court found that the couple raised funds from nearly 600 investors through two tokens, INDXcoin and Sumcoin, claiming that "God" guided them to create the tokens and forming a "prophetic team" to pray over key decisions. However, Judge Heidi Kutcher determined that INDXcoin was falsely marketed as a safe investment despite failing audits and having no market value, and was in fact "worthless because no one wanted to buy it."
Evidence showed that the couple deposited investor funds into bank accounts under their personal control and diverted at least $1.3 million for personal expenses including luxury goods, jewelry, vacations, cars, and home renovations. Additionally, in July, a grand jury indicted the couple on 40 felony counts, including racketeering, securities fraud, and theft, which could lead to imprisonment if convicted.
