Green United LLC has lost its bid to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), which accuses the company and its executives of orchestrating a fraudulent cryptocurrency mining scheme that allegedly defrauded investors of approximately $18 million. Defendants Wright Thurston and Kristoffer Krohn, who operated the firm, faced allegations of selling "Green Boxes" and "Green nodes," marketed as miners for the GREEN token on an imaginary "Green Blockchain."
In a decision issued on September 23, Judge Ann Marie McIff Allen ruled that the defendants failed to effectively counter the SEC’s claims regarding the securities violations. The judge affirmed that the SEC had sufficiently established the essential elements of a security in the form of an investment contract. She emphasized that Thurston's actions created an illusion for investors, suggesting they were earning GREEN tokens through mining, when in reality, token distribution was entirely at his discretion.
The SEC's lawsuit further claims that the hardware sold by Green United was not what it was advertised to be; instead of mining GREEN tokens, the equipment was reportedly Bitcoin mining rigs. Additionally, the SEC contends that the promised blockchain did not exist, raising serious questions about the legitimacy of the operation. Investors, according to the SEC, received no Bitcoin from their investments, undermining the validity of the mining scheme.
In their motion to dismiss, Thurston and Krohn argued that the SEC lacked authority over digital assets, citing congressional actions that allegedly rejected such oversight. They also contended that the SEC's enforcement actions violated the Due Process clause and the principle of separation of powers as outlined in the U.S. Constitution. However, Judge Allen rejected these claims, clarifying that the SEC was simply exercising its long-established regulatory authority, which has been in place for nearly a century.
With the dismissal of the motion, the SEC's lawsuit against Green United LLC will now proceed to the next phase, which typically involves discovery or potentially a trial. This development highlights ongoing tensions in the cryptocurrency sector, where regulatory scrutiny continues to grow amid concerns about investor protection and fraud.
Green United was founded by Thurston in Utah, operating from April 2018 until at least December 2022, with Krohn playing a key promotional role in the scheme. As this case unfolds, it underscores the complexities and challenges within the rapidly evolving landscape of digital assets.
September 2024, Cryptoniteuae