The Colorado Division of Securities announced on Sept. 16 that Denver District Court Judge Heidi L. Kutcher ruled against Indxcoin LLC and its founders, Eli and Kaitlyn Regalado, for committing securities fraud in violation of the Colorado Securities Act. The decision followed a three-day trial in May and resulted in a $3.34 million judgment, joint and several, against the defendants. The civil action originated in January 2024 when Securities Commissioner Tung Chan filed fraud charges, alleging the Regalados developed and promoted a worthless digital token.

Evidence presented at trial revealed extensive misrepresentations to potential investors. As documented in the case:

Indxcoin raised nearly $3.4 million from more than 300 individuals. The complaint alleged that the Regalados targeted Christian communities in Denver and made numerous misrepresentations and omissions to lure investors.

Despite lacking technical expertise and receiving an auditor’s report rating their coin at zero out of 10 for security, the couple assured buyers of stability and profit potential. They also launched their own trading venue, the Kingdom Wealth Exchange, which collapsed after one day of operation.

The case gained international attention when Eli Regalado admitted in a viral video that investor money was used to cover personal expenses and renovations. Prosecutors provided further detail:

The Regalados had no other source of income at the time and used investor money to fund a lavish lifestyle that included jewelry, luxury ski and yachting trips, designer clothes, dental work and even a Range Rover.

Beyond the civil ruling, a Denver grand jury indicted the couple in July on 40 criminal counts related to the same scheme. Commissioner Chan described the outcome as both justice for victims and reassurance for legitimate cryptocurrency projects that regulatory enforcement can safeguard small investors from fraud.

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