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Last upgraded: January 20, 2024 04:28 EST|2 minutes checked out
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Colorado-based pastor Eligio “Eli” Regalado and his partner, Kaitlyn, are dealing with legal action after presumably defrauding financiers of countless dollars through the sale of an unregistered crypto token, called INDXcoin.
The token was marketed to devout Christians as a “God-backed” digital possession.
The couple apparently raised around $3.2 million through sales of the token, which they released through their online church, Victorious Grace.
The Colorado Securities Commissioner submitted a suit versus the Regalados, implicating them of deceptive activities and prohibited sale of securities without appropriate registration.
As an outcome, a Colorado judge has actually frozen the possessions of Victorious Grace Church.
According to legal filings, the Regalados declared that INDXcoin was backed by a cryptocurrency index and had adequate possessions to protect its worth.
The Colorado Securities Commission declares that the token had little to no support, aside from the couple’s claim that it was supported by God’s warranty of success.
“Defendant Eli leveraged the possible financiers’ faith,” the grievance stated. “He mentioned that their financial investments’ success was ensured by God.”
INDXcoin Qualified as a Security
The Regalados at first argued that INDXcoin was an energy token instead of a security offering, hence declaring exemption from securities guidelines.
Professionals refuted their claim and mentioned that the token certified as a security.
Undeterred, the couple declared that God considered INDXcoin an energy token.
Financiers who revealed issues about the absence of returns were prompted by Eli Regalado to keep their financial investments, pointing out magnificent assistance.
The Regalados likewise managed the Kingdom Wealth Exchange, the platform through which INDXcoin might be exchanged for USD.
Colorado regulators declare that the couple regularly closed down the platform to avoid a bank run.
In 2015, they chose to close the exchange, mentioning an absence of active “stakers.”
They then advised INDXcoin holders to stay invested and prevent questioning the scenario, declaring that God had actually advised them to do so.
Throughout the course of their fundraising, the Regalados apparently abused $1.3 million for individual expenditures, consisting of high-end products, cosmetic dentistry, trips, and home restorations.
In a video published on the INDXcoin neighborhood website, Eli Regalado confessed to the charges however specified that a considerable part of the funds went to the IRS and home remodel that God had actually advised them to carry out.
The Regalados are set up to appear in court on January 29 for a hearing on the Colorado Securities Commissioner’s ask for an initial injunction.
In 2015, the SEC asked a judge to choose whether specific cryptocurrencies certify as securities in its continuous suit versus blockchain business Terraform Labs.
More just recently, in the SEC and Coinbase case, a federal judge questioned whether enabling the commission to enforce its policies on Coinbase would provide the company sway over markets it does not have authority to monitor.
