In an alarming turn of events, a Denver-based couple—Eli Regalado, a self-proclaimed online pastor, and his wife, Kaitlyn Regalado—have been indicted on 40 criminal counts tied to a cryptocurrency fraud scheme that allegedly bilked over $3 million from faith-based investors. The indictment, announced by Denver District Attorney John Walsh, shines a light on how religious influence was weaponized to carry out one of the most egregious affinity scams tied to digital assets.
The case underscores a disturbing intersection of trust, faith, and financial manipulation, where hundreds of unsuspecting believers were persuaded to invest in a valueless digital token—INDXcoin—based solely on spiritual promises and fabricated returns. Here’s a detailed analysis of the events, the legal action taken, and what this means for faith-driven communities and crypto investors.
Background: Who Are the Regalados?
Eli Regalado built an online persona as a Christian pastor and influencer, using sermons, webinars, and social media to reach a growing base of believers across Denver and beyond. Alongside his wife Kaitlyn, the duo presented themselves as spiritual leaders committed to guiding followers toward financial freedom through divine means.
According to court documents and testimony, the Regalados created and promoted a cryptocurrency token called INDXcoin through a platform they dubbed Kingdom Wealth Exchange. Between January 2022 and July 2023, they encouraged their followers to invest, often invoking messages they claimed came directly from God.
They raised nearly $3.4 million from over 300 individuals, nearly all of whom were fellow Christians from their community. The pitch was simple yet powerful: invest in INDXcoin, and God will bless you with wealth.
How the Scheme Worked
The mechanics of the fraud resemble a textbook affinity scam—tailored to a specific group and reinforced by mutual trust. Here’s how it unfolded:
- Spiritual Manipulation
The couple claimed divine insight and repeatedly told followers that investing in INDXcoin was God’s will. Some sermons suggested that the token was a “heaven-sent” opportunity. - Unregulated Platform
The token was sold exclusively through their private exchange, Kingdom Wealth Exchange, with no registration, oversight, or technical backing. It wasn’t listed on any public crypto exchanges. - Valueless Token
INDXcoin had no whitepaper, no project roadmap, no underlying utility, and no liquidity. Authorities determined that it had zero market value, and it never generated returns. - Misuse of Funds
At least $1.3 million of the funds raised were spent on personal luxuries, including a significant home renovation. The couple claimed that this was divinely inspired—alleging that the Lord had told them to use investor funds for their personal comfort.
The Indictment: Legal Details
The indictment includes 40 felony counts, ranging from securities fraud to theft and criminal impersonation. Specific charges include:
- Securities Fraud
- Conspiracy to Commit Securities Fraud
- Theft (in excess of $1 million)
- Money Laundering
- Wire Fraud
DA John Walsh noted that this was a “major step forward in holding the Regalados accountable.” He praised the work of the Colorado Division of Securities and the Colorado Attorney General’s Office, both of which played significant roles in the investigation.
A prior complaint in January 2024 had already brought civil fraud charges, but this criminal indictment opens the door to possible prison sentences and restitution orders.
Faith-Based Scams: Why They Work
Affinity fraud isn’t new, but it’s particularly effective in religious settings. According to the SEC and the FBI:
- Religious communities often have high levels of intra-group trust.
- Skepticism is lower when appeals are tied to spiritual authority.
- Victims are less likely to report scams to avoid causing embarrassment within their faith group.
In this case, the Regalados exploited all three.
Colorado Securities Commissioner Tung Chan emphasized: “We allege that Mr. Regalado took advantage of the trust and faith of his Christian community and peddled outlandish promises of wealth.”
The community impact is devastating—not just financially, but emotionally. Several victims have come forward anonymously, stating they invested life savings or emergency funds, convinced that it was a divinely approved decision.
Crypto’s Role: Opportunity or Exploitation?
The unregulated nature of cryptocurrency makes it fertile ground for scams:
- Anyone can mint a token using basic blockchain tools.
- Crypto projects don’t require traditional financial disclosures.
- Online platforms allow easy global reach with minimal oversight.
The INDXcoin case shows how these tools can be misused when combined with social engineering. Unlike established projects, this coin had no audit, no tech team, no public codebase, and no path to value creation.
Yet people invested. Why?
Because they trusted the messenger, not the message.
Regulatory Lessons
The Regalado indictment has sparked calls for stronger oversight:
- Tighter Regulation on Religious Financial Promotions Faith-based financial advice may need stricter advertising and licensing standards.
- Crypto Disclosure Laws Regulators may push for new laws requiring whitepapers, audits, or registration for tokens sold to the public.
- Affinity Fraud Watchlists States like Colorado may create public alerts or databases of known affinity schemes.
- Community Education Initiatives Increased outreach from the SEC, DOJ, and state agencies to religious communities could reduce future fraud exposure.
Community Response
Faith leaders across Colorado have condemned the actions of the Regalados. In a joint statement, several pastors said, “Scripture warns us about wolves in sheep’s clothing. This betrayal is not just a crime, but a spiritual deception.”
Meanwhile, online forums and victim support groups have formed to share resources and potentially pursue class-action civil litigation.
What’s Next?
The Regalados are scheduled to appear in court later this summer. If convicted, they could face up to 20 years in prison per count, along with restitution to victims and forfeiture of illegally obtained assets.
Colorado prosecutors have also signaled that additional charges may be filed if further financial misdeeds or co-conspirators are uncovered.
How to Protect Yourself
For individuals in faith-based communities—or any tight-knit group—here are key tips:
- Verify everything: Faith should never replace financial due diligence.
- Check with the SEC or state regulators before investing.
- Ask for documentation: whitepapers, team bios, legal disclaimers.
- Be cautious of exclusivity: If a project is “just for believers,” that’s a red flag.
- Consult independent advisors: Preferably those not connected to your religious group.
Final Thoughts
The case of Eli and Kaitlyn Regalado stands as a cautionary tale. It highlights the dangerous mix of unregulated finance, persuasive personalities, and spiritual manipulation.
The fact that over 300 people were allegedly defrauded under the guise of divine instruction speaks volumes about the need for vigilance—not just from regulators, but from communities themselves.
Faith is sacred. But when it’s used to push financial products, that trust must be earned, not exploited.
