Green United LLC has lost its attempt to dismiss an $18 million crypto mining fraud lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The SEC accuses the company and its executives, Wright Thurston and Kristoffer Krohn, of defrauding investors through a fraudulent cryptocurrency mining scheme.
In a ruling on September 23, Judge Ann Marie McIff Allen rejected the defendants’ motion to dismiss the SEC’s case. She stated that Green United had failed to refute the SEC’s allegations of securities fraud, specifically regarding the sale of “Green Boxes” and “Green nodes,” which were marketed as crypto miners for the GREEN token on the so-called “Green Blockchain.”
Fraudulent Mining Operation
The SEC alleges that Green United falsely claimed to offer mining equipment for the GREEN token on a blockchain that didn’t exist. Investors believed they were purchasing hardware that would mine GREEN tokens, but in reality, the equipment was Bitcoin mining rigs, and the GREEN tokens distributed to investors were issued solely at Thurston’s discretion, according to the SEC.
Judge Allen concluded that Thurston’s actions created the “illusion” that the investors were earning GREEN tokens through legitimate mining operations. She further stated that distributing tokens arbitrarily based on the number of Green Boxes owned constituted a “deceptive act in furtherance of the Green Box fraud.”
SEC’s Regulatory Authority Affirmed
Thurston and Krohn also argued that the SEC lacked the authority to regulate digital assets, claiming that Congress had not granted the agency such power and that enforcing these regulations violated the Due Process clause. However, Judge Allen dismissed this claim, affirming that the SEC’s lawsuit aligns with its longstanding regulatory authority granted by Congress nearly 90 years ago.
With the dismissal bid rejected, the case will now proceed to the next stage, likely involving discovery or a trial. The SEC’s investigation into Green United is focused on recovering the $18 million raised from investors who, according to the SEC, never received any of the promised Bitcoin or legitimate mining profits.
Green United, founded by Thurston in Utah in 2018, operated until at least December 2022. Krohn, who promoted the scheme, is also named in the SEC’s lawsuit.
