US Pastor Couple Indicted in $3.4M Crypto Scam Targeting Congregations: A Deep Dive and Lessons for Investors

Main Points:

• Case Overview: Pastor Eli and Caitlin Regalado charged with $3.4 million fraud using INDXcoin.
• Affinity Fraud Mechanics: How trust in religious communities is exploited.
• INDXcoin Exposed: Fake white paper with zero real backing.
• Defendant’s Confession: “God told me” defense.
• Crypto Scam Trends 2023–2025: Rising losses, record hacks, regional patterns.
• Spotting Scams: Red flags and best practices for safe investing.
• Trusted Exchanges: Recommended Japanese platforms for secure trading.

1. Case Overview: “Divine” Crypto Promise Turns Into $3.4M Fraud

In July 2025, Denver-based pastor Eli Regalado and his wife Caitlin were formally indicted for orchestrating a sophisticated cryptocurrency fraud that netted approximately $3.4 million (¥500 million) from church members and other Christians. Claiming divine revelation, they launched a “Kingdom Wealth Exchange” and sold their own token, INDXcoin, purportedly pegged to the top 100 cryptocurrencies. Over 300 investors were drawn in by promises of guaranteed high returns, only to discover that there was no underlying asset backing INDXcoin.

2. Affinity Fraud Explained: Betraying Trust Within Communities

2.1 What Is Affinity Fraud?

Affinity fraud occurs when scammers exploit the trust inherent in tightly‑knit groups—such as religious congregations—to market bogus investments. The Regalados’ positions as pastor and church staffer gave them unfettered access to a receptive audience, who were unlikely to question their authority.

2.2 Why Religious Communities Are Vulnerable

1. High Trust: Followers place near‑absolute faith in religious leaders.
2. Strong Bonds: Information shared within a closed community spreads rapidly and is rarely questioned.
3. Limited Financial Literacy: Many members defer financial decisions to leaders rather than conducting independent research.
4. Word‑of‑Mouth: Personal testimonials carry undue weight, discouraging skepticism.

3. INDXcoin Unveiled: A White Paper Without Substance

Despite a polished white paper boasting features like “benchmarking top 100 cryptocurrencies” and “risk‑mitigated growth,” INDXcoin had zero real value or technical integration. The couple siphoned off $1.3 million for personal expenses—home renovations, luxury items—and left investors with worthless tokens.

4. “God Told Me”: Inside the Defendants’ Confession

In March 2024, Eli Regalado released a video confession stating he believed divine instruction guided their pivot from a parking business to cryptocurrency. While invoking religious justification, his admission shifted blame onto an alleged higher power rather than accepting personal accountability.

5. Crypto Scam Trends 2023–2025

Analysis of global data reveals that cryptocurrency thefts and scams are surging once again, underscoring the risks investors face. Below is a bar chart illustrating total funds stolen in 2023, 2024, and the first half of 2025.

Insert Figure 1 here: Bar chart of stolen crypto funds (2023: $1.7 B, 2024: $2.2 B, H1 2025: $2.17 B)

5.1 Year‑Over‑Year Growth in Theft

• 2023: $1.7 billion stolen, a 54.3% drop from 2022 thanks to reduced DeFi hacks and stronger defenses.
• 2024: Theft surged 21.1% YoY to $2.2 billion, with 303 hacking incidents—a record fourth consecutive year above $1 billion.
• H1 2025: Already $2.17 billion lost, eclipsing all of 2024; the North Korea–linked Bybit hack alone accounted for $1.5 billion.

5.2 Geographic and Method Trends

• Regions Hardest Hit: United States, Germany, Russia, Canada, Japan, and South Korea see high victim counts.
• Service vs. Personal Wallet Hacks: 2025 data show growing personal wallet compromises (23.4% of total) alongside major service breaches.
• Evolution of Scams: From phishing and Ponzi schemes to sophisticated insider threats and social engineering.

6. How to Spot Crypto Scams: A Red‑Flag Checklist

1. Guaranteed Returns: Any promise of “risk‑free” profits is false.
2. Faith‑based or Celebrity Endorsements: Unverified endorsements often mask ulterior motives.
3. Opaque White Papers: Lack of technical detail or verifiable audits.
4. Pressure to Invest Quickly: Time‑limited offers are a common persuasion tactic.
5. Unregistered Entities: Always verify licensing with relevant financial authorities (e.g., Japan’s FSA).

7. Safe Havens: Trusted Japanese Crypto Exchanges

For secure trading and custody, consider platforms fully registered with Japan’s Financial Services Agency (FSA):

• Coincheck: User‑friendly interface and robust security measures.
• bitbank: Deep liquidity and competitive fees.
• SBI VC Trade: Strong backing from SBI Group, comprehensive compliance.
• BitTrade: Simple UI, real‑time chat support for new users.

8. Conclusion: Prioritize Security and Due Diligence

The Regalado case serves as a stark reminder that even those with perceived moral authority can perpetrate large‑scale fraud. As the crypto ecosystem grows, so too does the sophistication of scams. Investors must exercise critical judgment, demand transparency, and use only reputable platforms. By understanding affinity fraud mechanisms, staying informed on industry trends, and adhering to best practices, one can navigate the promising but perilous world of digital assets with greater confidence and safety.