According to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) accused Green United LLC and its executives of operating a fraudulent crypto mining scheme that raised $18 million. Defendants Wright Thurston and Kristoffer Krohn were accused of fraudulently offering securities through the sale of "Green Boxes" and "Green nodes."

On September 23, Judge Ann Marie McIff Allen ruled that the defendants failed to refute the SEC’s securities charges, stating that “the SEC has sufficiently alleged all necessary elements of a security in the form of an investment contract.”

The judge refused to dismiss the fraud charges against Thurston, saying his actions created the "false appearance" that investors received GREEN tokens through mining, when in fact investors were allocated GREEN according to Thurston's wishes.

The SEC also alleged that the hardware sold by Green United was actually Bitcoin mining machines, did not mine GREEN as advertised, and the so-called blockchain did not exist. The scheme raised approximately $18 million, and investors did not receive any Bitcoin.

Thurston and Krohn claimed that the SEC had no authority to regulate digital assets, violating the due process clause and separation of powers, but the judge rejected that argument. The SEC's lawsuit will move to the next stage, usually discovery or trial.