Green United LLC has failed to discharge a lawsuit filed by the SEC on operating a fraudulent crypto mining scheme that earned investors $18 million.
Green United Fails To Drop $18M Case For Crypto Mining Fraud
In March, the SEC accused defendants Wright Thurston and Kristoffer Krohn, who operated cryptocurrency mining firm Green United LLC, of fraudulently offering securities. They sold “Green Boxes” and “Green nodes” that were marketed as miners for the GREEN token on the “Green Blockchain.”
Green United Loses Bid In $18M Lawsuit
Judge Ann Marie McIff Allen stated in the Sept. 23 decision that the defendants had failed to refute the Securities and Exchange Commission’s securities allegations, asserting that the “SEC has adequately alleged all necessary elements of a security in the form of an investment contract.”
According to Judge Allen, Thurston’s actions resulted in the “illusion” that investors were earning GREEN tokens through mining, so he declined to invalidate the SEC’s fraud claims against him.
“In reality, they were only granted GREEN by Mr. Thurston’s discretionary decision to distribute it to investors, purportedly based on the quantity of Green Boxes they possessed.”
“[This] constitutes a deceptive act in furtherance of the Green Box fraud.”
An excerpt from the defendants’ motion to dismiss. Source: PACER
The SEC also claimed that the hardware sold by Green United was Bitcoin mining devices that did not mine GREEN as advertised, and the purported blockchain never existed.
The SEC stated that investors “did not receive” any Bitcoin mined by Green United, and the alleged scheme raised approximately $18 million.
Thurston and Krohn also asserted in their motion to dismiss that the SEC lacked authority over digital assets, as Congress had already “considered and rejected” its authority. They also contended that such enforcements contradict the Due Process clause and separation of powers outlined in the US Constitution.
Nevertheless, Judge Allen also rejected this argument:
“This action does not present any novel attempt at regulation by the SEC. Rather, the SEC, by this action, pursues the regulatory goals Congress set for it ninety years ago.”
The SEC’s lawsuit will proceed to the subsequent legal procedure phase, typically the discovery or trial stage.
On May 19, Thurston and Krohn submitted motions to dismiss the SEC’s lawsuit.
Thurston established Green United in Utah from April 2018 until at least December 2022, when Krohn contractually promoted the initiative.
