Green United LLC Faces SEC Lawsuit Over Alleged Crypto Mining Fraud

According to Cointelegraph, Green United LLC has failed to dismiss a lawsuit from the United States Securities and Exchange Commission (SEC), which accuses its executives of running a fraudulent crypto mining scheme that collected $18 million from investors. Defendants Wright Thurston and Kristoffer Krohn, who operated Green United LLC, were charged by the SEC in March for allegedly offering fraudulent securities. They sold “Green Boxes” and “Green nodes,” marketed as miners for the GREEN token on the “Green Blockchain.” In a decision on September 23, Judge Ann Marie McIff Allen stated that the defendants did not successfully counter the SEC’s securities allegations. She noted that the “SEC has adequately alleged all necessary elements of a security in the form of an investment contract.” Judge Allen also declined to dismiss the SEC’s fraud claims against Thurston, asserting that his actions created the “illusion” that investors were earning GREEN tokens through mining. In reality, the distribution of GREEN tokens was allegedly at Thurston’s discretion, based on the number of Green Boxes owned by investors. This, according to Judge Allen, constituted a deceptive act in furtherance of the Green Box fraud. The SEC also claimed that the hardware sold by Green United were actually Bitcoin (BTC) mining rigs that did not mine GREEN as advertised, and that the purported blockchain never existed. The scheme allegedly raised approximately $18 million, and investors did not receive any Bitcoin mined by Green United, according to the SEC. In their motion to dismiss, Thurston and Krohn argued that the SEC had no authority over digital assets, claiming that Congress had already “considered and rejected” its authority. They also contended that such enforcement actions violate the Due Process clause and separation of powers as outlined in the US Constitution. However, Judge Allen rejected this argument, stating, “This action does not present any novel attempt at regulation by the SEC. Rather, the SEC, by this action, pursues the regulatory goals Congress set for it ninety years ago.” The SEC’s lawsuit will now proceed to the next stage in the legal process, typically involving discovery or trial. Thurston and Krohn had filed motions to dismiss the SEC’s lawsuit on May 19. Green United was founded by Thurston in Utah and operated from April 2018 until at least December 2022, with Krohn contractually promoting the scheme.