Product1 publisher3 min readPublished
INDXcoin collected $3 million from 500 people through a referral chain of fellow believers
The Regalados had no crypto background and did not need one, because what moved the money was a warm recommendation from a minister who had already bought in himself, and that is a channel any product team would recognise.
The Product Desk · Product desk
What happened
- Eli and Kaitlyn Regalado, a Colorado couple with no background in crypto, created a coin called INDXcoin and promoted it through family, friends and contacts in evangelical Christian circles.
- More than 500 people handed the couple a total of more than $3 million for the coin.
- Debbie and Jose Bonilla, a retired couple, began withdrawing money in November 2022 and put $70,000 from their retirement accounts into INDXcoin, a large share of their nest egg.
- Within a year of the Bonillas buying in the project collapsed, investors lost everything, and some began asking whether they had fallen victim to an elaborate fraud.
- Chainalysis counted at least $14 billion collected by crypto scammers worldwide in 2025, a 17% increase on the previous year.
Compiled by The Product DeskSomething wrong?How this is made
Why it matters
- cost The households absorb the entire loss. A retired couple's $70,000 came out of accounts they cannot refill, and the friends who recommended the coin had bought it themselves, so nobody in the chain has the capacity to make anyone whole.
- exposure Any product whose growth runs on trusted community intermediaries inherits the intermediary's standing without inheriting any knowledge of the product, which puts a whole network into one bucket of correlated risk.
- constraint Without the disclosure Massad says the market lacks, a buyer's only available check is the referrer's judgment, which forecloses independent diligence for exactly the buyers least equipped to perform it.
- precedent When creating a coin costs nothing at the volume CoinMarketCap counts, the scarce asset is a list of people who act on a friend's word, and that makes congregations and similar tight networks the input worth acquiring.
Divide the money by the people and INDXcoin looks nothing like a token bought by whales. More than $3 million from more than 500 buyers works out near $6,000 each [8]. Debbie and Jose Bonilla's $70,000 was roughly twelve times that [9], and those two retirees accounted for a little over 2% of everything the Regalados took in [10].
Nothing technical had to work to move the average $6,000. Jose Bonilla's account of the decision is the whole mechanism: the couple heard about INDXcoin from friends, a minister and his wife who had also invested, and in Jose's words, "We just trusted that their judgment was good" [4]. The referrer's own purchase was the diligence. It carried information about the referrer, leaving the coin itself unexamined.
Teams who build referral and ambassador channels tell themselves a warm introduction pre-qualifies the buyer, that somebody closer to the product has already checked it. What moves through that channel is the referrer's standing; the buyer inherits none of the referrer's understanding of the product. Here the standing came from a pulpit, which is why the Regalados, who had no background in crypto [2], needed no technical edge at all.
The supply side is what makes community channels worth attacking. More than 3 million cryptocurrencies were minted in August 2026 alone, according to CoinMarketCap [11], and Jason Ghetian, a former FBI special agent who has served as an expert witness in crypto cases, puts the barrier at zero: "It's just something anybody can create" [12]. Minting is free; the scarce input is a list of people who will act on a friend's recommendation. Timothy Massad, former chairman of the US Commodity Futures Trading Commission, describes a market where "there isn't adequate disclosure; there's fraud, there's manipulation of the price, there's conflicts of interest" [13], which leaves the buyer's only real check the one they had already handed to someone else.
What Technology Review's investigation, produced with Type Investigations, does not establish is where the money went [17]. It records the collapse, the total losses, the Regalados' court testimony about the gifted coin that started it [6][16], and Debbie Bonilla's summary: "Poof - the money just evaporated. Like, how does that happen?" [14]. Eli Regalado says his own first reaction to the idea was "Absolutely not. I don't know anything about cryptocurrency, and I don't want to be caught up in some church scam" [15]. This record contains no technical exploit for anyone to find.
The usable version for a product team: sort your acquisition on two axes. Whether the buyer arrived through someone whose only stake in the product is that they bought it too, and whether the buyer can reverse the purchase without asking you. Referral-sourced buyers facing an exit that runs through you are the quadrant where losses land, and it is the quadrant where disclosure has to be loud enough to survive the introduction that got them there. For the biggest referral source in your funnel, write down what that referrer knows about the product beyond having paid for it. A blank line means the channel runs on trust alone, without any information behind it.
What to watch
- Court filings that trace the $3 million would move this from an unexplained collapse to a documented diversion.
- Whether Chainalysis's next annual count rises again from the at least $14 billion it recorded for 2025.
- Whether any disclosure requirement reaches tokens sold inside affinity networks, which is the gap Massad describes.