Judge Rules in Favor of Plaintiffs in 18 Million Crypto Mining Fraud Case Against Green United
**TLDR**
Green United LLC’s attempt to dismiss the SEC lawsuit regarding an $18 million cryptocurrency mining fraud has failed. The SEC accused company executives of selling mining equipment for a non-existent blockchain. A judge ruled that the SEC sufficiently demonstrated the existence of securities in the form of an investment contract. The defendants’ assertion that the SEC lacks authority over digital assets was rejected. The case will now advance to the discovery or trial phase.
Green United LLC, a cryptocurrency mining company, has not succeeded in its bid to have the U.S. Securities and Exchange Commission (SEC) lawsuit dismissed. This case revolves around accusations of an $18 million fraudulent cryptocurrency mining operation and is now set to progress following a recent judicial ruling.
The SEC has alleged that executives Wright Thurston and Kristoffer Krohn engaged in fraudulent practices by marketing mining equipment for a blockchain that was, in fact, non-existent. The firm purportedly promoted devices called “Green Boxes” and “Green Nodes” as miners for a token named GREEN on the so-called “Green Blockchain.”
On September 23, Judge Ann Marie McIff Allen ruled that the defendants failed to adequately counter the SEC’s claims regarding securities violations. The judge concurred that the SEC had convincingly established all necessary elements of a security in the form of an investment contract.
According to the SEC’s allegations, Green United raised approximately $18 million through this scheme, with investors reportedly not receiving any of the Bitcoin that was promised from the mining operations. Instead, the equipment sold by Green United was merely Bitcoin mining hardware that did not generate the advertised GREEN tokens.
Judge Allen also rejected the dismissal of fraud claims against Thurston, asserting that his actions created a misleading impression that investors were acquiring GREEN tokens through mining activities. In reality, the distribution of these tokens was allegedly at Thurston’s discretion, depending on the number of Green Boxes owned by investors.
The defendants contended that the SEC lacked jurisdiction over digital assets, arguing that Congress had already deliberated and dismissed such regulatory authority. However, Judge Allen refuted this claim, emphasizing that the SEC’s actions are not a new regulatory endeavor but rather an enforcement of the regulatory objectives set forth by Congress nearly ninety years ago.
The ruling indicates that the lawsuit will move into the next stage of the legal process, which typically involves either discovery or a trial. This development signifies an important milestone in the SEC’s ongoing efforts to combat fraudulent activities within the cryptocurrency realm.
Founded by Thurston in Utah, Green United operated from April 2018 through at least December 2022, with Krohn playing a role in promoting the scheme. Both executives had previously filed motions to dismiss the SEC’s lawsuit on May 19, but these efforts have now been denied.
This case exemplifies the persistent challenges faced in the cryptocurrency sector, where the distinction between innovative ventures and potentially deceptive schemes can often become obscured. It also highlights the SEC’s unwavering commitment to enforcing securities regulations in the digital asset market, even as discussions continue regarding the scope of its authority in this domain.
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