Denver Pastor and Wife Convicted in $3.4M INDXcoin Crypto Scam: A Cautionary Tale for 2025
- How Did the INDXcoin Scheme Work?
- Where Did the $3.4 Million Actually Go?
- Why Did This Scam Specifically Target Christians?
- What Are the Legal Consequences?
- How Can Investors Avoid Similar Scams?
- Frequently Asked Questions
In a case that reads like a modern-day parable of greed and deception, Denver pastor Eli Regalado and his wife, Kaitlyn, have been found guilty of orchestrating a $3.4 million cryptocurrency fraud through their INDXcoin scheme. Targeting their own Christian community, the couple promised "low-risk, high-profit returns" while secretly spending investor funds on luxury cars, vacations, and home renovations. With a 20-year ban from selling securities and potential prison time looming, this scandal serves as a stark reminder of the dangers lurking in unregulated crypto ventures.
How Did the INDXcoin Scheme Work?
The Regalados launched INDXcoin in 2021 through their company INDXcoin LLC, marketing it as a revolutionary cryptocurrency indexed to the top 100 coins by market cap. Their pitch was mathematically simple: take the combined value of these coins, divide by 100, and voilà - you've got INDXcoin's price. When their Kingdom Wealth Exchange launched, they claimed each coin was worth about $9, creating the illusion of instant profits for early buyers who purchased at $1-$1.50.
However, as the BTCC research team notes in their analysis of similar index-based coins, "The fatal flaw in these schemes is always liquidity." The exchange collapsed in 2023 when a Canadian trader exploited this weakness, executing a series of sell orders that drained the platform's reserves. Trading data from CoinMarketCap shows no verifiable record of INDXcoin ever maintaining stable liquidity.
Where Did the $3.4 Million Actually Go?
Court documents reveal a spending spree that WOULD make Wall Street bankers blush. Of the $3.4 million raised from over 300 investors:
- $1.3 million funded personal luxuries including a Range Rover and designer jewelry
- Thousands went toward "divinely inspired" home renovations
- Funds covered luxury ski trips, yacht charters, and even dental work
In a now-infamous video confession, Eli Regalado claimed God instructed the home remodel, while half the money allegedly went to the IRS. "It's the oldest scam in the book," remarks Tung Chan, Colorado's securities commissioner. "Dress up personal greed as divine providence."
Why Did This Scam Specifically Target Christians?
The Regalados exploited religious trust with disturbing precision. Their marketing materials blended financial promises with biblical references, and Eli's emails to investors included verses like Daniel's prayers during persecution. When confronted, they bizarrely claimed INDXcoin wasn't an investment but a "religious fellowship" token.
This tactic isn't new - according to a 2024 FTC report, faith-based affinity scams have surged 217% since 2020. "Scammers know shared beliefs lower skepticism," explains financial analyst Mark Troughton. "When a pastor says God blessed an investment, congregants often check their logic at the church door."
What Are the Legal Consequences?
The Denver District Court's September 2025 ruling delivered harsh penalties:
| Defendant | Restitution | Ban Duration |
|---|---|---|
| Eli & Kaitlyn Regalado | $3.39 million | 20 years |
| Nathanael Enos | $19,600 | 20 years |
Judge Heidi Kutcher noted the couple's "astonishing lack of remorse" and their stated desire to expand the scam. The civil case follows a July criminal indictment on 40 counts that could bring prison time. Interestingly, phantom listings of "INDXcoin" still appear on some exchanges including Bitget, though these may be unrelated tokens.
How Can Investors Avoid Similar Scams?
The BTCC compliance team suggests three red flags:
- Overly simplistic returns: No legitimate investment guarantees profits without risk
- Affinity pressure: Be wary of opportunities exclusively marketed through religious or community groups
- Lack of transparency: INDXcoin never disclosed how funds would actually be used
As crypto regulations evolve post-2024's landmark SEC rulings, even "faith-based" investments must comply with securities laws. This case proves divine inspiration won't hold up in court.
Frequently Asked Questions
What was INDXcoin's supposed value proposition?
INDXcoin claimed to mirror the average price of the top 100 cryptocurrencies, offering diversified exposure through a single token. In reality, it lacked the liquidity to support this model.
How were the Regalados caught?
The scheme collapsed when traders exploited the liquidity gap. Colorado securities regulators then traced the misused funds through blockchain analysis and bank records.
Are any INDXcoins still traded?
While some exchanges list tokens named INDXcoin, none have been confirmed as the Regalados' version. The court didn't provide a contract address for verification.
What's the status of the criminal case?
As of September 2025, the 40-count indictment is pending trial. If convicted, the Regalados face possible prison time beyond the civil penalties.
How were investors recruited?
Primarily through the Regalados' church network and crypto seminars targeting Christian communities in the Denver area.
