God told them to sell crypto. Their investors lost everything.
This article was produced in partnership with Type Investigations and with support from the Fund for Investigative Journalism. When Eli Regalado first heard God speak to him, he wondered whether he was hallucinating.
Eli Regalado, a Colorado resident, describes hearing divine messages from God as a persistent inner voice or thought that feels external to his own mind. These messages, which he compares to a movie line or a loved one’s voice, guide major life decisions, including marriage, home purchases, and career choices. In 2021, at age 41, Eli and his wife Kaitlyn (then 28) received repeated divine instructions to enter the cryptocurrency market. Eli initially resisted, citing his lack of expertise and concerns about fraud in the crypto sector. However, he eventually obeyed what he perceived as God’s will, leading the couple to launch INDXcoin, a cryptocurrency they promoted within Christian communities. The Regalados’ belief in divine direction shaped their financial and personal decisions, including the creation and sale of their crypto project.
Cryptocurrency, often shortened to crypto, refers to digital or virtual currencies that use cryptography for security and operate independently of central banks. In 2021, the crypto market was experiencing a boom, with many investors making substantial profits from early-stage coins. The Regalados, despite their limited knowledge of crypto, decided to create INDXcoin and sell it to fellow Christians, believing this aligned with God’s plan. More than 500 investors, including retirees like Debbie and Jose Bonilla, contributed over $3 million to the project. The Bonillas, who withdrew $70,000 from their retirement savings, trusted the Regalados based on recommendations from their minister and his wife. However, the project collapsed within a year, leaving investors with significant financial losses.
Crypto fraud has surged alongside the industry’s growth. In 2025, global crypto scammers stole at least $14 billion, a 17% increase from the previous year, according to blockchain analytics firm Chainalysis. In the U.S., victims of fraudulent crypto schemes reported $7.2 billion in losses to the FBI. Fraud is prevalent because crypto investments are highly speculative, prices are volatile, and the market lacks robust oversight. In the U.S., crypto is regulated by multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network, but enforcement has weakened. For example, the Justice Department disbanded its crypto crime unit in 2025, and the SEC has scaled back lawsuits against crypto firms. This regulatory fragmentation makes it easier for scams to thrive.
Affinity fraud targets specific communities, such as religious groups, by exploiting trust and shared beliefs. The Regalados are accused of using their Christian faith to persuade investors to buy INDXcoin, which prosecutors allege was essentially worthless. This tactic is common in crypto scams, where fraudsters leverage personal connections to gain credibility. In 2024, the Colorado Division of Securities filed a civil lawsuit against the Regalados, accusing them of spending nearly 40% of the $3 million raised—$1.3 million—on personal expenses like vacations, luxury items, and home renovations. The case highlights how fraudsters manipulate trust within close-knit communities to deceive investors.
The U.S. crypto market operates under a fragmented regulatory framework, with multiple agencies sharing oversight but lacking consistency. The SEC regulates securities, the CFTC oversees commodities, and other bodies handle financial crimes and consumer protection. However, the boundaries between these roles are unclear, creating loopholes that fraudsters exploit. For example, the SEC proposed new rules in August 2026 to narrow when crypto transactions fall under securities laws, further limiting oversight. Political influence has also weakened enforcement, with crypto-friendly candidates receiving $135 million in campaign donations during the 2024 election cycle. This has led to reduced scrutiny of the industry, making it harder for authorities to protect investors.
Most cryptocurrencies, with the exception of stablecoins (coins pegged to stable assets like the U.S. dollar), are highly speculative investments. Unlike traditional assets, they lack underlying cash flow or productive capacity, meaning their value depends entirely on demand. Experts like Hilary Allen, a law professor, compare them to Ponzi schemes, where returns for early investors are paid using funds from new investors rather than legitimate business activities. The Regalados’ INDXcoin had no tangible backing, and its value was driven solely by speculation. This lack of intrinsic value makes crypto investments extremely risky, as prices can plummet rapidly when confidence wanes.
In January 2024, the Colorado Division of Securities filed a civil lawsuit against the Regalados, accusing them of securities fraud and misusing investor funds. The lawsuit alleged that the couple spent $1.3 million of the $3 million raised on personal expenses, including luxury purchases and vacations. In July 2025, Denver’s district attorney charged the Regalados with 40 felonies, including theft, racketeering, and securities fraud. If convicted, they could face decades in prison. Despite these allegations, the Regalados maintain they were following God’s will and deny any wrongdoing. Their case underscores the risks of combining religious messaging with high-risk financial ventures.
Eli Regalado’s belief in divine guidance began during a 2002 prison sentence for car theft, when he claims God told him he would receive probation—a highly unlikely outcome at the time. After his release, he struggled with addiction and financial instability but later embraced charismatic Christianity, a movement emphasizing personal encounters with God, including prophecy and speaking in tongues. By 2020, he founded a church called Victorious Grace and started preaching online. His religious convictions shaped his personal and professional life, leading him to quit drugs, hire friends and family, and eventually launch INDXcoin based on what he perceived as divine instruction.
Before entering crypto, the Regalados faced significant financial difficulties. In 2020, their marketing business, Grace Led Marketing, struggled with unpaid taxes totaling over $160,000 and underperforming crowdfunding campaigns. Kaitlyn took $60,000 from her 401(k) to fund a home renovation, nearly doubling the size of their house. In October 2021, following a televangelist’s sermon on sowing a seed (a prosperity gospel practice where believers donate money to receive future blessings), they donated their last $2,718.44 to Bill Winston Ministries. Just two weeks later, Eli’s sister gifted them Sumcoin, a cryptocurrency they believed was worth around $2 million. This sequence of events reinforced their belief that God was guiding them toward crypto.
Sumcoin, the cryptocurrency gifted to the Regalados in late 2021, was created in 2016 by Ty Jacobsen, an Idaho-based investor. It was marketed as the *world’s first index-based cryptocurrency*, with its price supposedly determined by an algorithm tracking the top 100 cryptocurrencies. However, Sumcoin had no underlying assets to support its value. The Regalados believed it was worth $2 million and decided to sell it to Christians, believing God had instructed them to do so. They later created INDXcoin, a new cryptocurrency they promoted through Christian networks. Despite initial sales of $260,000 by February 2022, both projects collapsed, leaving investors with losses. Sumcoin was never listed on major exchanges, highlighting the lack of transparency and liquidity in such projects.
