SEC Takes Action Against Church for Unregistered ‘God-Backed’ Crypto Token, Freezes Assets

  • The news article reveals a disturbing case where a Colorado-based church, Victorious Grace, and its founders leveraged religious sentiment to allegedly defraud investors through the sale of an unregistered cryptocurrency token.
  • The SEC’s involvement in this case emphasizes the importance of addressing such challenges to ensure investor protection and market integrity in the rapidly evolving cryptocurrency landscape.

In a recent development, the Securities and Exchange Commission (SEC) has intervened, freezing the assets of the Colorado-based Victorious Grace Church and its founders, Pastor Eligio “Eli” Regalado and his wife, Kaitlyn. The church is facing legal repercussions for allegedly defrauding investors through the sale of an unregistered cryptocurrency token known as INDXcoin, marketed as a “God-backed” digital asset.

The lawsuit, filed by the Colorado Securities Commissioner, accuses the Regalados of engaging in fraudulent activities and conducting the illegal sale of securities without proper registration. The couple purportedly raised approximately $3.2 million by issuing the token through their online church.

Initially promoted as backed by a cryptocurrency index with sufficient assets, the SEC alleges that INDXcoin lacked substantial backing, except for the couple’s claim that it enjoyed God’s guarantee of success. The complaint states that Pastor Eli leveraged investors’ faith, assuring them that their investments were divinely guaranteed.

Despite the Regalados’ initial assertion that INDXcoin was a utility token exempt from securities regulations, experts contested this classification, asserting that the token qualified as a security. Undeterred, the couple insisted that God designated INDXcoin as a utility token, encouraging concerned investors to hold onto their investments based on divine guidance.

The Regalados also controlled the Kingdom Wealth Exchange, the platform facilitating the exchange of INDXcoin for USD. According to Colorado regulators, the couple routinely shut down the platform to prevent a bank run and eventually closed it, instructing INDXcoin holders to remain invested, citing divine instructions.

During their fundraising efforts, the Regalados allegedly misappropriated $1.3 million for personal expenses, including luxury items, cosmetic dentistry, vacations, and home renovations. In a video posted on the INDXcoin community site, Pastor Eli admitted to the charges but claimed that a significant portion of the funds went to the IRS and home remodeling, tasks he asserted were instructed by God.

The Regalados are scheduled to appear in court on January 29 for a hearing on the Colorado Securities Commissioner’s request for a preliminary injunction.

This case underscores the SEC’s ongoing scrutiny of cryptocurrency offerings and the broader question of how regulatory frameworks apply to digital assets. The SEC’s intervention in cases like these reflects the agency’s commitment to ensuring investor protection and maintaining the integrity of financial markets. As the crypto landscape continues to evolve, regulatory bodies face the challenge of defining and enforcing appropriate standards for this rapidly growing sector.

SEC Halts Church’s ‘God-Backed’ Crypto Scheme, Freezes Assets Amidst Alleged Fraud

In the aftermath of the SEC’s intervention against Victorious Grace Church and its founders for the sale of the ‘God-backed’ cryptocurrency token, INDXcoin, the regulatory crackdown underscores the imperative for stringent oversight in the evolving landscape of digital assets. The freezing of assets and legal action against the church and its leaders, Pastor Eli and Kaitlyn Regalado, serve as a stark reminder of the potential risks investors face in the crypto space. As regulatory bodies like the SEC actively address fraudulent activities, this case highlights the need for clarity in the classification of digital tokens and the importance of protecting investors from deceptive schemes. The upcoming court hearing will likely shed light on the broader implications for regulatory frameworks governing crypto offerings and the responsibilities of entities promoting such ventures.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Mehar Nayar

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