The Charity Commission said it has opened an inquiry into SPAC Nation to probe financial and safeguarding concerns.
The commission, which describes the London church as a charity set up to "advance Christianity" that works particularly with young people, has ordered it to bank all cash while the investigation takes place.
The news comes after HuffPost UK reported allegations that some members of the church had been taking teenagers to donate blood for medical trials in a practice known as "bleeding for seed".
The church, which denies the claims, has previously been praised by politicians for its work to tackle knife crime and gang violence.
The commission said a case had been opened on SPAC Nation in April last year, and in November this year information received from the trustees "raised further concerns about the charity's financial controls, policy and procedures".
In a statement, it added: "Of immediate concern to the commission is that substantial amounts of charity money are held in cash.
"As a protective measure, the commission has issued an order under Section 84 of the Charities Act, requiring the charity to bank its money.
"The commission is also concerned about the apparent lack of clarity between the personal, business and charity roles of leaders within the charity."
The commission said it opened the inquiry to "examine matters furthers" after allegations emerged that individuals had been encouraged to give money to the charity by "taking on personal debt".
A Charity Commission spokesman said: "The issues that have been raised related to SPAC Nation in recent weeks are highly concerning, even more so as the allegations are entirely at odds with the expectations about the way that charities will operate.
"The opening of this inquiry is an important step that will allow us to examine these concerns further and establish the facts.
"We will seek to provide assurance to the public and the community that these matters will be considered fully and, where necessary, resolved."
A report with the commission's findings is expected to be published once the investigation is concluded.
SPAC Nation has been contacted for comment.
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