SEC Lawsuit Against Green United Moves Forward

The U.S. Securities and Exchange Commission (SEC) has received a significant ruling in its ongoing lawsuit against Green United, a Utah-based company. On Monday, a district judge ruled that the case will proceed to trial, highlighting the serious allegations brought against the company.

In March, the SEC accused Green United of perpetrating a fraudulent scheme that resulted in the loss of approximately $18 million for investors. The allegations center around the sale of fraudulent crypto mining equipment, specifically marketed as “Green Boxes.” This multi-level marketing operation enticed affiliates with the promise of earning a share from each sale of these $3,000 devices.

According to the SEC’s complaint, investors were led to believe that these Green Boxes were specialized crypto miners capable of generating substantial returns—between 40% to 50% monthly. The marketing claims suggested that the boxes mined a cryptocurrency known as GREEN tokens on a purported Green Blockchain, which was described as supporting a “public global decentralized power grid.” However, investors never received the physical equipment they purchased. Instead, they were informed that the machines would be hosted remotely at a data center controlled by Green United.

The reality, however, was starkly different. The Green Blockchain that Green United claimed to operate did not exist. The so-called Green Boxes were not the advanced mining devices they were marketed to be. Instead, the founder of Green United, Will Thurston, along with promoter Kristoffer Krohn, allegedly misappropriated investor funds to purchase S9 Antminers—commercially available bitcoin mining machines. These machines were purportedly used by Thurston to mine bitcoin for personal gain, rather than for the investors who funded the operation.

Investors in this scheme did not receive the actual bitcoin generated from their purchases. Instead, they were given periodic distributions of worthless GREEN tokens that were created by Thurston on the Ethereum blockchain. This misrepresentation and the allocation of funds indicate a clear pattern of fraud, as investors were deceived into believing they were participating in a legitimate venture.

Despite attempts by Green United’s legal team to dismiss the case, U.S. District Court Judge Ann Marie McIff Allen ruled that the SEC had sufficiently established that the Green Boxes constituted a security. This ruling enables the case to advance to trial and supports the SEC’s allegations of fraud against the company.

The judge’s decision has sparked discussions and debates within the cryptocurrency community. Some voices on social media have misinterpreted the ruling, claiming that the SEC’s stance implies that crypto mining devices are classified as securities. In response to this confusion, Neeraj Agrawal, the director of communications at the crypto advocacy group Coin Center, urged the public to remain calm, clarifying that this case pertains to a typical fraud scheme often referred to as “cloud mining.”

The ruling does not delve into the specifics regarding the S9 Antminers or the actual bitcoin that Green United allegedly mined. This lack of focus on the details surrounding the mining equipment may leave some questions unanswered about the operational aspects of the company and how investor funds were managed.

As the case moves forward, it will be crucial to examine the legal definitions of securities in the context of cryptocurrency and whether such classifications will impact similar operations in the future. The outcome of this lawsuit could set important precedents for the regulation of cryptocurrency-related investments and the responsibilities of companies operating within this rapidly evolving industry.