‘The Lord told us to’: Denver pastor and wife found liable for $3.3 million crypto fraud scheme

A Denver District Court ruled that INDXcoin, a cryptocurrency marketed and sold by local pastor Eli Regalado and his wife Kaitlyn, was a fraudulent scheme. Judge Heidi L. Kutcher found the Regalados and their firm, INDXcoin LLC, liable for securities fraud, entering a $3.34 million judgment against them. 

The Regalados raised nearly $3.4 million between June 2022 and April 2023 from more than 300 individuals, largely from Denver's Christian community, promising low-risk, high-profit returns through their Kingdom Wealth Exchange platform. But the exchange collapsed within a day, leaving investors with nothing. Despite an auditor rating the project's security "0 out of 10," the couple continued marketing INDXcoin as a safe investment opportunity, according to the Colorado Division of Securities.

The court's decision, issued on Sept. 12 following an earlier three-day bench trial and announced in a release on Tuesday, resolves all outstanding issues in the civil case brought by Colorado Securities Commissioner Tung Chan, who initially filed the fraud charges in January 2024. 

In a video response at the time, which garnered widespread international attention, Eli Regalado admitted to cashing out the funds, saying half the money they pocketed went to the IRS and the remainder was for a "home remodel the Lord told us to do." Evidence showed funds also went toward a Range Rover, jewelry, luxury ski and yachting trips, designer clothes, and even dental work.

Colorado regulators argued the Regalados exploited their religious ties and lack of crypto expertise to lure victims. Commissioner Chan described them as "21st century false prophets" who misused the promise of new technology to carry out an old scam, with the ruling a victory for small investors.

The civil ruling follows an earlier April decision confirming that INDXcoin qualified as a security under state law. Separately, in July, a Denver grand jury criminally indicted Eli and Kaitlyn Regalado on 40 counts regarding the alleged multi-million-dollar cryptocurrency scam.