Down Arrow Button Icon

One of the best parts of writing about crypto is the constant supply of colorful villains. Think of wild-haired Sam Bankman-Fried, whose $30 billion con took in celebrities and politicians, or Razzlekhan, the wannabe rapper who was one half of the Bonnie-and-Clyde duo behind one of the world’s biggest Bitcoin heists. Last week brought us a new name to add to the cast of crooks: Denver internet pastor Eli Regalado, whose sheer chutzpah should get him honorable mention on any list of all-time crypto villains.

According to Colorado’s securities regulator, Regalado ran a small-time swindle in which he and his wife pulled in over $3 million persuading hundreds of people to invest in something called INDX coin. His appeals, which were heavy on Old Testament–style words like “sowing” and “tithing,” promised those tied to his online church that they would earn a 10x return by buying it.

Not surprisingly, they did not make 10x but instead lost their money—not least because the Regalados spent a good chunk of it on sprucing up their house, according to the regulator. A Denver business publication further reported the couple blew more of the money—which they had said would help “widows and orphans”—on a Range Rover, jewelry, and, of course, luxury handbags.

These reports suggest Regalado is in a fair amount of trouble, but rather than shut up and seek a good lawyer, he responded to Colorado’s allegations by posting a 10-minute video to the crypto project’s website. Near the opening, he says misappropriating the funds wasn’t his decision but that “several hundred thousand went to a home remodel the Lord told us to do.”

Later in the video, Regalado explains he launched the crypto hustle because he believed “God was doing a new thing.” While his theology may be shaky, his grasp of finance may be even worse as, in the video, Regalado throws around terms like “leverage” and “liquidity” without appearing to understand what they mean. At one point in the video, he describes “$300 million of coins sown before the exchange went live”—but as the Colorado regulator explains, the coins are worthless, in no small part because the only place they could be traded was the Kingdom Wealth Exchange, a service operated by the Regalados that is defunct and barely functioned in the first place.

The next steps are likely to involve the state of Colorado grabbing whatever remaining funds are available and returning them to investors. Regalado, meanwhile, used his video to predict the INDX mess will work itself out since “God is going to work a miracle in the financial sector.”

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

The most successful short call of 2023 was by a crypto-skeptic blogger, who predicted Signature Bank was in trouble before its exposure to a crypto firm helped drive it into bankruptcy. (Bloomberg)

China has formed a working group of government and big tech companies to standardize metaverse development, including terminology and architecture. (The Block)

Franklin Templeton's laser-eyed social media posts are raising eyebrows as some suggest pro-crypto hype is not the solution to the asset manager's shrinking market cap. (FT)

Vanguard responded to boycott calls over its refusal to list Bitcoin ETFs by also booting crypto futures ETFs—a decision rooted in its founder's longtime skepticism of commodity investments. (Bloomberg)

Bitcoin prices halted their decline and look poised to hover around $41,000, while volume has dropped and no clear narrative has emerged among analysts about what comes next. (Cointelegraph)