Green United LLC Faces SEC Lawsuit: Allegations of $18 Million Crypto Mining Fraud

Green United LLC Faces Legal Battle with SEC over Fraudulent Crypto Mining Scheme

In a significant ruling, the United States Securities and Exchange Commission (SEC) has successfully moved forward with its lawsuit against Green United LLC and its executives, accused of running a fraudulent crypto mining operation that allegedly swindled $18 million from investors. This case highlights persistent issues within the cryptocurrency industry regarding regulatory compliance and fraud.

Background of the Case

The SEC first charged defendants Wright Thurston and Kristoffer Krohn in March, alleging they offered fraudulent securities through their company. The pair marketed investments in products such as “Green Boxes” and “Green Nodes,” which they claimed were capable of mining the GREEN token on something they referred to as the “Green Blockchain.”

Legal Ruling

On September 23, Judge Ann Marie McIff Allen made a critical ruling, stating that the defendants did not present a sufficient case to dismiss the SEC’s allegations. The judge emphasized that the SEC had convincingly demonstrated all necessary elements of a security in the form of an investment contract. Furthermore, she reaffirmed the SEC’s fraud claims against Thurston, mentioning that his conduct had created an illusion that investors were earning GREEN tokens through mining activities.

Judge Allen noted that the actual distribution of GREEN tokens was under Thurston's control and was not based on legitimate mining outputs. This deception contributed to the ongoing fraudulent activities surrounding the Green Boxes.

Hardware Misrepresentation and Allegations

In a compelling aspect of the case, the SEC argued that the hardware marketed by Green United was merely Bitcoin (BTC) mining rigs rather than the specialized miners for GREEN tokens they were advertised to be. Moreover, the SEC stated that the so-called blockchain associated with the project never even existed. According to these allegations, the scheme was a total failure, raising substantial funds without providing any legitimate returns to investors.

Defendants' Defense and Court's Response

In their defense, Thurston and Krohn attempted to argue that the SEC lacked jurisdiction over digital assets and claimed that the regulatory body was exceeding its constitutional authority—a point quickly dismissed by Judge Allen. She clarified that this case did not introduce any novel regulatory attempts by the SEC; instead, it sought to implement the regulatory objectives established by Congress nearly a century ago.

Next Steps in the Legal Process

With the dismissal motion rejected, the SEC’s lawsuit against Green United LLC will now enter its next phase, which typically involves discovery or a potential trial. This step comes after the initial motions were filed to dismiss the lawsuit on May 19. Green United, founded by Thurston in Utah, has been operating since April 2018 and continued until at least December 2022, with Krohn providing promotional support during that period.

Conclusion

The legal proceedings against Green United LLC serve as a reminder of the regulatory scrutiny faced by cryptocurrency companies. As fraud cases continue to surface in the rapidly evolving crypto landscape, the SEC's commitment to enforcing compliance underscores the importance of investor protection in this novel industry.

To stay updated with ongoing developments in cryptocurrency regulations and news, consider following reputable sources like Cointelegraph and engaging in discussions within the crypto community.