Rev. Eli Regalado in a screengrab from Regalado’s video response to a lawsuit by Colorado state regulators on INDX cryptocurrency website.
Prosecutors in Colorado say an online reverend and his wife raked in millions through a “worthless” cryptocurrency scam for their digital church.
Eli and Kaitlyn Regalado now face civil fraud charges after investigators uncovered how the couple allegedly squandered over $1 million from investors on everything from home renovations and child care to luxury vehicles, jewelry, makeup, handbags, snowmobile trips and more.
The Regalados created a cryptocurrency targeting Christians known as “INDXcoin” over a year ago, prosecutors said. The Colorado attorney general said in an announcement late last week that the state’s securities division found that from June 2022 to April 2023, INDXcoin generated almost $3.2 million from roughly 300 investors for its bunk product.
In his videos promoting the digital currency, Eli Regalado, having no background in crypto whatsoever, “took advantage of the trust and faith of his own Christian community” by claiming it was easy for his followers to become wealthy by putting their funds into INDX and letting him and the lord take it from there, prosecutors allege.
INDXcoin code was “unsafe, unsecure and riddled with serious technical problems,” prosecutors charge, but Regalado and his wife were undeterred and promoted their “worthless” product as a “low risk, high profit investment.”
In a video posted to the INDX website responding to the charges, Regalado appeared to admit to the allegations, saying he was “asking the lord what he wanted me to say” before addressing investors.
“The charges are Kaitlin and I pocketed $1.3 million and I want to say those charges are true,” Regalado said.
“I was asking the lord what he wanted me to say and he said, just let me speak through you. Let me come out first and foremost by saying that Kaitlin and I are being charged in a civil charge from Colorado SEC for basically selling millions of dollars worth of cryptocurrency that is deemed worthless by the state,” he said. “Now the reason they are saying it’s worthless is because there is no exit for people who have bought — everyone who is watching this who has put money into this who wanted to take money out, you’ve been unable to do that. We launched an exchange, the exchange technology failed, things went downhill and from that point forward, we’ve just been waiting on the lord, literally for a miracle.”
In the roughly 10-minute long video, Regalado stresses that of the more than $3 million prosecutors claims he swindled, $1.3 million was “taken out of $3.4 million but out of that $1.3 million, half a million went to the IRS and a few hundred thousand dollars went to a home remodel the that the lord told us to do.”
“I don’t want to mince words or try to escape it, but I want to, if I can, communicate to you heart to heart and tell you how we got here. It’s not like we had $1 million sitting there and decided to go crazy with it,” Regalado says, sometimes stammering through remarks.
He also claims that before INDXcoin, “the lord” guided him and his wife toward investing in another cryptocurrency but it turned out to be a scam. He does not name what cryptocurrency that might have been.
“That’s the best way I can describe it. I said, lord, you told me to do this,” he said, before rattling off a series of claims while invoking financial and religious buzzwords alike.
Regalado operates an online-only nonprofit church known as Victorious Grace and created INDXcoin and its exchange known as Kingdom Wealth Exchange. It was the only exchange where his digital currency could be purchased or sold off but the exchange was shuttered in November.
Denver news outlet BusinessDen reported first that the exchange’s abrupt closure triggered Regalado to post videos online telling investors to stay the course despite a lack of an off-ramp.
“Just take that word as gospel truth and execute on that word and do not worry about how the money’s going to happen. I really believe you’re going to see a miracle in very short order,” Regalado said.
After prosecutors announced the civil fraud charges, Eli Regalado urged investors not to be mad with regulators or prosecutors in the video message.
“They have to do this. We sold a cryptocurrency with no clear exit. We took god at his word and sold a cryptocurrency with no clear exit. So prosecutors have to take that and willingly say ‘they sold it with no exit’ … what we’re praying for and believing for still is god is going to do a miracle and work a miracle in the financial sector and bring a miracle into INDX money and everyone who has come in for money will be able to receive money back and that’s the state’s case, everyone who has bought in, will be able to withdraw some money,” he said.
“I know this looks bad, I know this looks terrible … Lord, we did what you told us to. We sowed heavily … I don’t know how god’s going to turn this around,” he said.
Colorado Securities Commissioner Tung Chan warned when announcing the charges against the Regalados that “new coins and new exchanges are easy to create with open source code” and that consumers should be “very skeptical” of them.”
The online church’s website no longer appears to be active; a review by Law&Crime notes a link to the site says the domain has expired.
In addition to the husband and wife duo, prosecutors in Colorado also named INDXCoin LLC, Kingdom Wealth Exchange LLC and Grace Led Marketers LLC. Kaitlyn Regalado also goes by the name Kaitlyn Dorsey, court records show.
