Mugshots of Eli Regalado, left, and Kaitlyn Regalado. (Denver District Attorney’s Office)
A Denver pastor who persuaded 600 people to spend $3.4 million for a supposedly God-inspired cryptocurrency has been charged with 40 counts of theft, fraud and racketeering.
Eli Regalado, 45, and his wife Kaitlin, 32, were indicted by a grand jury in Denver this week. They turned themselves in to police and were released on bond, court records show.
The long list of criminal charges against the Regalados arrive 18 months after the Colorado Division of Securities filed a civil lawsuit accusing them of using Christianity to bilk investors in INDXcoin, a cryptocurrency that cannot be traded or sold, rendering it worthless.
Those allegations and the Regalados’ defenses were the subject of a three-day civil trial in early May. The Regalados, representing themselves in the case, were reprimanded at times for sermonizing as they made the argument that INDXcoin buyers did not expect returns.
“Our whole focus in this trial is to show how terrible and inconsistent and absolutely amateur this (Division of Securities) investigation was,” Eli Regalado said in his opening statement.
“We didn’t defraud people, we didn’t scam people, we’re not predators, we’re not full of greed,” Kaitlyn Regalado said in her own remarks. “Many people got saved by this project.”
The couple, who are experienced marketers, created INDXcoin in 2021. They sold $3.4 million in coins and spent $1.3 million of that on personal expenses. The central promise of INDXcoin was that its value would be indexed: Take the price of the 100 most valuable cryptocurrencies, add them up, divide by 100 and you would have the price of one INDXcoin.
When Kingdom Wealth Exchange, the online marketplace where INDXcoin was bought and sold, opened, the indexed value was about $9. But INDXcoin did not have anywhere near enough liquidity to rebuy at $9 the coins it had sold for $1 or $1.50. So, one unidentified trader in Canada made a flurry of sales, drained the liquidity and forced its closure.
“One homie just freakin’ smoked it,” testified Nathanael Enos, a friend of the Regalados.
The Kingdom Wealth Exchange has remained down since closing in November 2023, leaving owners of INDXcoins without a way to buy, sell or trade their millions of crypto.
Eli Regalado speaks to INDXcoin buyers in a since-deleted video on Jan. 19, 2024. (YouTube)
“From the outset, the market for INDXcoin was inherently deceptive,” Assistant Attorney General Sarah Donahue said in May, “and the value of the coin was inherently deceptive.”
Denver District Judge Heidi Kutcher has not issued a verdict in that civil case. Donahue and the Division of Securities are seeking $3.4 million from the Regalados.
Meanwhile, the couple is scheduled to be in a different courtroom Thursday morning for a first appearance before Judge Karen Brody in their criminal cases. The 40 felony charges against them stem from the same INDXcoin sales that were litigated in May.
“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,” Denver District Attorney John Walsh said in a news release Tuesday that thanked the Division of Securities.
Requests for comment from Eli and Kaitlyn Regalado were not answered this week.
The 47-page indictment against them lists dozens of victims whose names are redacted, one of whom allegedly lost $200,000 to the INDXcoin scheme. That may be Kevin Terrien, a commercial real estate consultant and the only victim to testify for the state in May.
“My crypto wallet had the calculated algorithmic value of INDXcoin on there, what it could be,” he said then. “But there was no exchange, so it was a fantasy. It was stardust, man.”