The US Securities and Exchange Commission (SEC) has sued an altcoin company. A Utah-based company is allegedly selling $18 million worth of counterfeit cryptocurrency mining equipment. Here are the details…
SEC targets altcoin company
The U.S. Securities and Exchange Commission (SEC) has sued Green United, alleging that the Utah-based company violated federal securities laws by selling $18 million worth of counterfeit crypto mining equipment. According to the SEC’s complaint, Green United and two others — the company’s founder, 46-year-old Utah resident Wright Thurston, and its main backer, 43-year-old Utah resident Kristoffer Krohn — were selling “Green Boxes” for $3,000. These Green Boxes are private crypto mining machines that allegedly mine GREEN tokens on the Green Blockchain.
Investors were told that the issued GREEN tokens support a “public, global, decentralized power grid,” while delivering a nice monthly return of 40 percent to 50 percent. Investors were also told that the success of their investment depends on maintaining control of the “Green Boxes”, which will be hosted remotely in a data center controlled by Green United. It has been suggested that the GREEN tokens produced by their machines will be distributed to investors.
“Green Blockchain” did not exist
However, according to the SEC, Green United’s mining rigs never mined GREEN because GREEN was not a minable altcoin and the so-called Green Blockchain did not exist. Instead, Thurston allegedly created GREEN tokens on the Ethereum Blockchain and distributed them to investors’ wallets “a few months” after he and Krohn began selling the machines to investors in April 2018.
Additionally, contrary to Krohn’s statements to Green United’s investors, the SEC claims that the value of GREEN tokens never increases. Untradable on a secondary market until fall 2020, the altcoin’s current price of $0.004 is well below its promised starting value of 2 cents per token. According to the SEC, Green United’s real plan was to trick investors into buying S9 Antminers, which look like “Green Boxes.” cryptocoin.com As we reported, S9 Antminers is Bitcoin mining equipment. In fact, investors’ purchases were functional and even Bitcoin was mined.
The SEC is seeking permanent injunctions against Green United, Thurston and Krohn, as well as his removal from office and civil penalties. This isn’t Krohn’s first encounter with the SEC. In 2012, the SEC took injunctive relief against the entrepreneur for violating federal securities laws “for making false statements in connection with a real estate investment program.”
Is the SEC going after cryptocurrency miners?
Meanwhile, the crypto community on Twitter addressed comments on the complaint suggesting that the SEC is going after crypto miners, arguing that crypto projects related to miners are securities investment contracts. One such claim came in a March 6 tweet by “MetaLawMan,” claiming to be a lawyer. However, crypto advocate and investment advisor Timothy Peterson argued that the comment was a “bad approach” and added that the case was “not aimed at mining in general.” Because it is clear that this is a fraud disguised as “mining”.
No the SEC is not coming after mining. No the SEC did not classify hosting as a security.
The below tweet by @MetaLawMan is FUD on a level I can hardly believe.
Thank you to @DanSpuller and @CryptoLawUS for helping us confirm. https://t.co/ug1PinPPWU
— Dennis Porter (@Dennis_Porter_) March 6, 2023
