Eli and Kaitlyn Regalado, a Colorado couple who marketed a cryptocurrency called INDXcoin to evangelical Christian communities, are facing 40 felony charges, including racketeering, theft, and securities fraud. The couple allegedly raised more than $3 million from over 500 investors, many of whom were friends, family, or members of their religious network.

The Regalados claimed they were directed by God to launch the digital asset, which they promoted as a “wealth transfer.” However, a civil lawsuit filed in January 2024 by the Colorado Division of Securities alleged that the couple used approximately $1.3 million of the invested funds for personal expenses. According to the suit, the money was spent on luxury items and services, including a Range Rover, designer clothing, high-end vacations, and home renovations.

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Investors, such as retired pharmacy technician Debbie Bonilla and her husband Jose, reported losing significant portions of their retirement savings after the project collapsed within a year of their investment. Experts note that the case is an example of “affinity fraud,” where perpetrators exploit the trust inherent in close-knit communities to solicit funds. “The ties you have with other people—the trust you have—is what the people who are running the scam play on,” said Tung Chan, commissioner of the Colorado Division of Securities.

The Regalados have maintained their innocence, asserting that they were simply following divine instructions. Eli Regalado, who previously operated a marketing firm, has a history of legal issues, including a prior conviction for theft. While the couple faces potential decades in prison if convicted, the broader cryptocurrency market continues to face challenges regarding regulation and investor protection. Legal experts suggest that a fragmented regulatory environment and recent shifts in federal enforcement have made it increasingly difficult to oversee the digital asset sector.

Source: MIT Technology Review