Utah-based Green United LLC supplied software and crypto mining equipment as part of an $18 million "fraudulent scheme" that never mined what it claimed would, according to the U.S. Securities and Exchange Commission (SEC). Mined cryptocurrencies. Regulators filed the lawsuit against Green United, its founder Wright Thurston and contract promoter Kristoffer Krohn in Utah District Court on March 3.
The complaint alleges that the firm and two representatives fraudulently offered securities between April 2018 and December 2022 by selling $3,000 worth of “green box” and “green node” investments, allegedly in “green block Mining green tokens on the "chain".
Investors were allegedly told that the company would develop a green blockchain to create a "public global decentralized grid," and that the GREEN token would increase in value based on its efforts, with monthly returns of up to 50%. However, the SEC claims that the hardware sold did not mine GREEN because it is an Ethereum-based ERC-20 token that cannot be mined, and the Green Blockchain does not exist.
It added that GREEN tokens were created “a few months” after the initial hardware sale to investors and were distributed regularly to “create the appearance of a successful mining operation.”
Instead, according to the SEC, the real plan was to use the funds to buy S9 Antminers — Bitcoin Mining equipment - passed to investors as green "boxes" and "nodes". The company mined bitcoins, not GREEN tokens that investors “didn’t receive.” Meanwhile, the crypto community on Twitter has offered an interpretation of the SEC complaint that suggests the SEC is going after crypto miners, arguing that selling miners or providing them with custody services is a securities investment contract.
On March 6, a pseudonymous lawyer “MetaLawMan” posted a tweet. However, crypto advocate and investment advisor Timothy Peterson believes this interpretation is a "misinterpretation," adding that the case is not "against the mining industry in general." “The SEC is not saying ‘all sales of mining equipment are now a security,’” Peterson clarified. Another cryptocurrency commentator, Dennis Porter, CEO of Bitcoin advocacy group Satoshi Action Fund, tweeted that “the SEC will not come after mining” and that it “does not classify custody as a security.” ,” and said Green United’s operations were “a scam in disguise” as mining. "
The SEC has asked the court for an order ordering Thurston, Krohn and Green United to cease operations, seek civil penalties for securities law violations and repay allegedly $18 million in ill-gotten gains.
