Denver Pastor and Wife Indicted in $3.4M Crypto Fraud Scheme Targeting Religious Investors

A Denver-based online pastor, Eli Regalado, and his wife, Kaitlyn, have been indicted on 40 counts related to a $3.4 million cryptocurrency fraud scheme targeting religious investors. The charges stem from their promotion of INDXcoin, a digital asset marketed through their platform, Kingdom Wealth Exchange, between January 2022 and July 2023. The couple allegedly leveraged their religious authority to persuade followers that the token was divinely sanctioned, claiming God instructed them to invest in it [1]. Prosecutors allege the Regalados raised over $3.4 million from at least 300 investors, with most proceeds diverted to personal expenses such as home renovations, while the token itself retained no value [2].

The indictment, announced by Denver District Attorney John Walsh, highlights the fraudulent nature of the scheme, which exploited the trust of the Christian community. “These charges mark a major step forward in our work to hold the Regalados accountable for their alleged crimes and to bring a measure of justice to the victims,” Walsh stated. The case was a collaborative effort involving the Colorado Division of Securities and the Colorado Attorney General’s Office [1]. The couple had previously been charged in January 2024 for their role in the scam, with Colorado Securities Commissioner Tung Chan emphasizing how Regalado “peddled outlandish promises of wealth” to followers [2].

The scheme’s structure mirrors broader trends in crypto fraud, where unregulated digital assets are marketed through trust-based relationships. INDXcoin, like many scam tokens, lacked a viable product or transparent development roadmap, relying instead on aggressive fundraising tactics and false return promises. Authorities noted that only a small fraction of the raised funds supported the business, with the majority used for luxury purchases and personal expenditures. This case underscores the risks of unregulated crypto investments, particularly when scams exploit religious or emotional appeals to obscure their fraudulent nature [1].

The DOJ’s action aligns with increased scrutiny of crypto-related crimes. In May 2024, law enforcement in New Zealand arrested a man accused of stealing $265 million in digital assets, illustrating the global scale of such frauds. The Regalados’ case, however, is notable for its intersection of faith-based influence and financial exploitation. Analysts suggest such cases may pressure regulators to strengthen guidelines for digital asset promotions, especially in communities where trust is leveraged for fundraising [2].

The indictment also raises questions about the role of online platforms in facilitating crypto scams. Regalado reportedly used digital channels to reach a wide audience, bypassing traditional financial institutions. While platforms like Coinbase and PNC Bank have expanded crypto services to meet demand, this case highlights the need for enhanced consumer protections and due diligence [1]. Law enforcement reportedly tracked transaction patterns to build the case, demonstrating the importance of forensic tools in crypto investigations.

If convicted, the Regalados could face significant penalties, reflecting the DOJ’s commitment to holding crypto scammers accountable. The case serves as a cautionary example of how fraudulent schemes exploit legal gray areas in the rapidly evolving crypto market. As the industry matures, regulators, investors, and platforms must collaborate to enhance transparency and reduce systemic vulnerabilities. For now, the indictment underscores the urgent need for individual vigilance and institutional safeguards in the digital asset space.

Sources:

[1] [BTCUSD - Colorado pastor and wife indicted for $3.4M crypto scam](https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96479951/colorado-pastor-and-wife-indicted-for-3-4m-crypto)

[2] [Cointelegraph: Colorado pastor and wife indicted in $3.4M crypto scam](https://cointelegraph.com/news/online-pastor-indicted-3-4m-crypto-scam)

[3] [PNC Bank to launch crypto trading via Coinbase partnership](https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96476987/pnc-bank-to-launch-crypto-trading-via-coinbase-par)