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A Denver judge has ordered Eli and Kaitlyn Regalado to pay nearly $3.4 million in damages after ruling that INDXcoin, a cryptocurrency the couple marketed to Christian communities as divinely inspired, was a security sold through fraud and misrepresentation.
The couple, who say God instructed them to create the coin as a ‘wealth transfer’ for fellow believers, also face 40 felony charges filed by Denver’s district attorney in July 2025.
“I was really feeling that this is the wave of the future,” Debbie said.
Jose said the promise of substantial returns was also central to their decision.
“There was an explanation of how wonderful the returns would be,” Jose said. “That was the selling point—that you could become rich overnight.”
The Regalados had initially become involved with Sumcoin, a little-known cryptocurrency they said was gifted to them by Eli’s sister and her husband. Eli testified that he believed God told him to take the coin to Christians.
The couple had no professional background in cryptocurrency. Nevertheless, after selling Sumcoin to members of their religious network, they later said they received another divine instruction: “Build your own coin.”
That decision produced INDXcoin.
INDXcoin was designed to calculate its price based on the value of the top 100 cryptocurrencies by market capitalization. The Regalados promoted it through family members, friends, ministries, social media, a podcast and a Christian television program.
The project’s promotional materials described INDXcoin as a cryptocurrency offering significant growth with relatively low risk. The couple also established a referral system that offered commissions of as much as 30% to people who helped sell the coin.
For prospective investors, however, the project carried an important promise: liquidity.
The Regalados initially indicated that INDXcoin would eventually be listed on established exchanges. When that proved difficult, they decided to build their own trading platform, Kingdom Wealth Exchange, where investors would supposedly be able to exchange INDXcoin for bitcoin, ether and US dollars.
The project encountered repeated technical and financial problems.
A security audit of the INDXcoin blockchain reportedly gave it a score of zero out of 10. A follow-up audit in March 2023 produced a score of 5.4 after some issues had been addressed.
Financial concerns also emerged. One investor who worked as a financial consultant warned the couple that the project was seriously undercapitalized. Another investor, Roger Gauthier, said he asked whether money had been set aside to accommodate people who wanted to sell their holdings.
There was none, according to the account.
Dan Wheeler, a crypto influencer who advised the Regalados, said he warned that hundreds of millions of dollars would be needed to support the stated value of the coins.
“If there’s no money there,” Wheeler said, “it’s worthless.”
Despite those concerns, the Regalados launched Kingdom Wealth Exchange on April 11, 2023.
The platform quickly ran into the problem its critics had feared: investors wanted to sell more INDXcoin than the exchange could support.
The exchange initially displayed values that made some investors’ holdings appear dramatically larger. The Bonillas’ $70,000 investment, for example, appeared to be worth more than $716,000.
But investors struggled to sell.
“All the liquidity is gone,” Kaitlyn told Eli after the money available to facilitate trades was exhausted.
The following day, the couple suspended sales.
The collapse brought the Regalados under regulatory scrutiny. In January 2024, Colorado securities commissioner Tung Chan filed a civil case accusing the couple of using investors’ Christian faith to sell cryptocurrency that was “essentially worthless.”
The lawsuit alleged that approximately $1.3 million nearly 40% of the money raised was spent on personal expenses, including vacations, clothing, jewelry, cosmetic dental work, a Range Rover, an au pair and home renovations.
Chan emphasized the role of personal trust in the alleged crypto scam.
“The ties you have with other people the trust you have is what the people who are running the scam play on,” — Tung Chan, commissioner of the Colorado Division of Securities.
The Regalados rejected the allegations and maintained that they were following what they believed were instructions from God rather than deliberately defrauding investors.
“If you think following the Lord is reckless, then yeah, we were very reckless,” Eli said. “Because we just listened and did what the Lord said to do.”
The legal dispute intensified in July 2025, when Denver’s district attorney charged the couple with 40 felonies, including theft, racketeering and securities fraud. If convicted, they could face decades in prison.
The couple have pleaded their case as a matter of faith and insist they did not orchestrate a crypto scam.
The civil proceedings, however, produced a significant setback for them. A judge ruled that INDXcoin was a security and found that the Regalados had misled investors about the cryptocurrency’s value, risks, distribution and use of funds.
The judge ordered them to pay nearly $3.4 million in damages, corresponding to the amount raised.
“Ascribing an algorithmic value to a coin does not make it ‘worth’ that amount,” the judge wrote. “In reality, INDXcoin was worthless because no one wanted to buy it.”
The Regalados have said they intend to appeal.
The collapse left investors facing very different consequences.
An investigation involving interviews with 20 INDXcoin investors found that most had little or no previous experience with cryptocurrency. Some used retirement savings, pension proceeds, business-sale money or home-equity borrowing to purchase the coin.
One investor, a disabled veteran in his 70s, hoped the investment would help repair his finances after accumulating debt during cancer treatment. Another retiree eventually returned to work at Home Depot.
“It’s a gut-wrenching, horrible, helpless feeling,” one investor said.
Yet investors do not agree about whether the Regalados deliberately ran a crypto scam.
Jose Bonilla, who reported the couple to authorities, believes their conduct was intentional. His wife, Debbie, reached a different conclusion, saying she believed they had simply become overwhelmed by a project they did not understand.
Some investors continue to support the couple.
Troy Bramblet, a former pastor who lost more than $18,000, said the Regalados were acting according to their beliefs.
“They’re hearing God’s voice and trying their best to follow it,” Bramblet said. “It doesn’t guarantee success.”
Wheeler, who advised the couple and also alerted authorities, likewise questioned whether they deliberately set out to steal from investors. But he said the way the money was spent raised serious concerns.
The Regalados themselves have acknowledged one of the central problems surrounding the project. In a video released after the legal case began, Eli admitted that they had “sold a cryptocurrency with no clear exit” and acknowledged receiving $1.3 million, including money spent on the unfinished home renovation.
Despite the collapse, the couple continue to believe INDXcoin could eventually succeed. They maintain that the cryptocurrency may gain traction as confidence in the US dollar changes and say they are preparing for that possibility.
Story Source; The MIT Review
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