The Securities and Exchange Commission (SEC) has successfully defeated a motion to dismiss its lawsuit against Green United LLC, a cryptocurrency mining company accused of running a fraudulent scheme. The SEC alleges that the company’s executives, Wright Thurston and Kristoffer Krohn, defrauded investors out of $18 million by selling unregistered securities.
Green United LLC offered investors the opportunity to purchase “Green Boxes” and “Green nodes,” which were marketed as mining hardware for the GREEN token on the “Green Blockchain.” However, the SEC alleges that these products were fraudulent and did not generate the promised returns.
The SEC accused Thurston of creating the illusion that investors were earning GREEN tokens through mining. In reality, the company distributed tokens at its own discretion, based on the number of Green Boxes owned by investors. This deceptive practice constituted a violation of securities laws.
The SEC also alleged that the hardware sold by Green United was not actually mining GREEN tokens as advertised. Instead, the company was using Bitcoin mining rigs to generate revenue. The alleged scheme raised approximately $18 million, and investors did not receive any Bitcoin mined by Green United.
Thurston and Krohn attempted to dismiss the SEC’s lawsuit, arguing that the agency lacked authority over digital assets and that the enforcement actions violated the Due Process clause and separation of powers. However, Judge Ann Marie McIff Allen rejected these arguments, stating that the SEC has the authority to pursue such actions.
With the dismissal of the defendants’ motion, the SEC’s lawsuit will now proceed to the discovery or trial stage. The SEC will likely seek to gather additional evidence and information to support its claims.
The SEC’s action against Green United LLC is a significant step in combating fraud within the cryptocurrency industry. The case highlights the importance of investor protection and the SEC’s role in regulating digital assets. As the cryptocurrency market continues to evolve, it is essential for investors to be vigilant and conduct thorough due diligence before investing in any crypto-related projects.
