Green United LLC has been unsuccessful in its attempt to dismiss a lawsuit initiated by the United States Securities and Exchange Commission (SEC). The SEC has accused the company’s leaders of running a fraudulent cryptocurrency mining operation that allegedly swindled $18 million from investors.
The lawsuit specifically targets the actions of Wright Thurston and Kristoffer Krohn, who managed Green United LLC. They are accused of misleading investors through the sale of products known as “Green Boxes” and “Green Nodes,” which were marketed as mining equipment for a token called GREEN, allegedly operating on a fictional “Green Blockchain.” A ruling from Judge Ann Marie McIff Allen, issued on September 23, stated that the defendants failed to adequately challenge the SEC’s securities allegations, reinforcing the view that the SEC had satisfactorily demonstrated all the essential components of an investment contract.
In her ruling, Judge Allen highlighted that the defendants’ assertions gave investors a false impression of earning GREEN tokens through mining operations. Rather than receiving tokens derived from their investments, returns were distributed at Thurston’s discretion, allegedly based on the quantity of Green Boxes they possessed. This discrepancy was deemed a deceptive maneuver contributing to the fraudulent activities tied to the Green Boxes.
Furthermore, the SEC alleged that the hardware sold by Green United was, in reality, Bitcoin (BTC) mining equipment that did not perform as claimed, pointing out that the promised blockchain infrastructure never existed. As a result, investors did not receive any Bitcoin from the mining activities as they were led to believe.
In their motion to dismiss the SEC’s claims, Thurston and Krohn contended that the SEC lacked jurisdiction over digital assets due to previous legislative decisions. However, Judge Allen countered that the case did not introduce any unprecedented regulatory approaches, asserting that the SEC is acting within the regulatory framework established by Congress nearly a century ago. The lawsuit will now progress to the subsequent stages of legal proceedings, potentially heading towards discovery or trial.
