- SEC Accusations
- Court Decision
- Defendant and Next Steps
Green United LLC has lost its bid to dismiss a lawsuit from the United States Securities and Exchange Commission, which has accused its executives of operating a fraudulent crypto mining scheme that raked in $18 million from investors.
SEC Accusations
The SEC accused Wright Thurston and Kristoffer Krohn — who operated cryptocurrency mining firm Green United LLC — of fraudulently offering securities after selling “Green Boxes” and “Green nodes” marketed as miners for the GREEN token on the “Green Blockchain.” According to the SEC, the hardware sold by Green United were actually Bitcoin (BTC) mining rigs that didn’t mine GREEN as advertised.
Court Decision
In the Sept. 23 decision, Judge Ann Marie McIff Allen said the defendants failed to rebut the SEC’s securities allegations, stating that the “SEC has adequately alleged all necessary elements of a security in the form of an investment contract.” Judge Allen declined to dismiss the SEC’s fraud claims against Thurston, claiming his actions created the “illusion” that investors were earning GREEN tokens through mining. “In reality, they received GREEN only according to Thurston’s whim to distribute it to investors, allegedly on the basis of how many Green Boxes they owned,” which she deemed a “deceptive act in furtherance of the Green Box fraud.”
Defendant and Next Steps
In its motion to dismiss, Thurston and Krohn also claimed that the SEC had no authority over digital assets as Congress already “considered and rejected” its authority. However, Judge Allen also knocked back this argument, stating, “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 now move on to the next part in the legal process, typically the discovery or trial stage.
In conclusion, the court’s decision in favor of the SEC means that Green United LLC will now face further legal proceedings in the $18 million crypto mining fraud allegation.
