Kristoffer Krohn unsuccessfully asserted in his appeal that the SEC’s lawsuit did not state that the Green Boxes were securities offerings or investment contracts.
A federal judge in Utah has rejected an appeal to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against a promoter of an alleged $18 million fraudulent crypto mining scheme. The case involves Kristoffer Krohn and Green United LLC.
On November 26, Judge Ann Marie McIff Allen denied Krohn’s request to appeal her September 23 ruling, which allowed the SEC’s case against Green United to proceed. The judge stated that Krohn failed to present sufficient grounds for the appeal.
“The Court declines to certify this case for interlocutory appeal because Mr. Krohn has not shown any substantial ground for difference of opinion as to the controlling law governing any matter the Court addressed in its Sept. 23 Order,” Allen wrote.
Arguments and Ruling
Krohn argued that the SEC had not adequately demonstrated that Green United’s “Green Boxes” constituted investment contracts as alleged in the regulator’s complaint.
He also accused the SEC of misinterpreting the Howey test used to define securities.
However, Judge Allen dismissed Krohn’s claims, noting his arguments lacked legal basis. She stated that Krohn had not provided evidence to support his assertion that the court misapplied legal definitions, saying he “offered no legal support to show any court has adopted the definition” he suggested.
SEC’s Allegations Against Green United
In 2023, the SEC accused Green United executives of running a fraudulent crypto mining operation that raised $18 million from investors between April 2018 and December 2022.
The scheme allegedly involved selling investments in “Green Boxes” and “Green nodes,” which the SEC claims were falsely marketed as mining Bitcoin.
According to the SEC complaint, investors were promised that Green United was building a “Green Blockchain” and that its GREEN token would gain value based on the company’s efforts, yielding high returns.
However, the SEC alleges that the Green Blockchain never existed, and the GREEN token was created after the hardware sales began, distributed periodically to suggest success falsely.
Green United founder Wright Thurston has also filed a separate motion seeking to dismiss the SEC’s lawsuit.
