As you know, I’m a sucker for hilarious finance news, and therefore for Matt Levine’s Money Stuff newsletter. More recently, this cracked me up: Pastor got his crypto scam audited. This has everything you could possibly desire in a finance story.
[…] a pastor named Eli Regalado and his wife Kaitlyn, who started a crypto thing called INDXcoin, and a crypto exchange called Kingdom Wealth Exchange to trade it. Standard stuff, you know, God told them to sell crypto, etc.:
INDXcoin raised nearly $3.2 million from more than 300 individuals. The complaint alleges that Regalado targeted Christian communities in Denver and claimed that God told him directly that investors would become wealthy if they put money into INDXcoin. > …
The Regalados allegedly continued to promote the INDXcoin as a low risk, high profit investment.
The complaint alleges that in reality, the INDXcoin was illiquid and practically worthless; investors lost millions; and Defendants dissipated investor funds to support their lavish lifestyle.
In brief, you got a pastor who scammed Christians out of money with crypto to live a life of luxury and due a large-scale remodelling of his house because God commanded it. Disney movie stuff. What did His Pastorness respond to the charges?
The pastor – who had worked in digital marketing – responded in a video message posted on the project’s website, sharing a sentiment that’s unusual from a crypto founder cornered by government authorities: “Those charges are true.”
“We sold a cryptocurrency with no clear exit,” he said, explaining that God told him to build it and give investors ten times the money they put in. “We did. We took God at his word.”
“The Lord told us to walk away from our parking company. … He took us into this cryptocurrency … well, that cryptocurrency turned out to be a scam…. And I said Lord … you told me to do this,” he said in the video.
The couple also took about $1.3 million from more than $3 million raised for the project. Regalado said about $500,000 went to the Internal Revenue Service, and a “few hundred thousand” was devoted to a home remodeling project that “the Lord told us to do.”
This, to me, is an amazingly hilarious example of how reality is stranger than fiction because fiction at least has to make sense: reality is under no such obligation. The quotes “… that cryptocurrency turned out to be a scam” and “we took God at his word” makes it sound very much like God himself decided to launch a shitcoin and then rug-pulled like any story you may read on Molly White’s Web3 is Going Great. But it wasn’t God, it was the pastor! Ha!
I also love the fact that technically the pastor was not lying when he claimed that INDXcoin underwent an audit: he simply forgot to state that it has also failed the audit, and spectacularly so:
“Defendants touted the safety of INDXcoin and the KWE by telling investors that the coin and the exchange had undergone a rigorous audit.” How’d the audit go?
The auditor, Hacken, told Defendants their products’ “security score” was zero out of ten. Additionally, wrote Hacken, “[c]onsidering all metrics, the total score of the report is 0 out of 10.”