In a high-profile crypto case, the U.S. Securities and Exchange Commission (SEC) is moving forward with its lawsuit against Green United, a Utah-based operation accused of defrauding investors out of $18 million through a fake crypto mining scheme. The scam revolved around selling investors $3,000 “Green Boxes,” which were touted as advanced crypto mining devices designed to mine GREEN tokens on a non-existent “Green Blockchain.”
According to the SEC’s complaint, Green United, led by founder Will Thurston and promoter Kristoffer Krohn, promised investors 40% to 50% monthly returns from the mining operations of these Green Boxes. However, investors never physically received the equipment. Instead, they were told the machines would be housed in a Green United-controlled data center, remotely managed by the company.
The Reality Behind The Green Boxes
While investors believed they were contributing to a decentralized power grid through Green United’s blockchain, the truth was much darker. The Green Blockchain never existed. Though the Green Boxes were real in a sense, they weren’t the sophisticated machines as advertised. According to the SEC, Green United used investor funds to purchase commercially available bitcoin mining machines – S9 Antminers – for their own use, with Thurston mining bitcoin for himself.
However, instead of receiving any profits from actual bitcoin (BTC) mining, investors were paid in GREEN tokens, which were worthless digital assets created by Thurston on the Ethereum blockchain. The SEC alleges that these distributions were nothing more than a façade to maintain the illusion of a legitimate business operation.
Legal Battle Intensifies
In an attempt to dismiss the case, Green United’s lawyers argued that the SEC’s claims were baseless. However, U.S. District Court Judge Ann Marie McIff Allen ruled that the SEC had presented enough evidence to allow the case to proceed. Specifically, the judge noted that the SEC had “sufficiently alleged a security in the form of Green Boxes,” giving the green light for the fraud allegations to go to trial.
This ruling has sparked a wave of controversy within crypto circles. One prominent user on X (formerly Twitter) posted, “SEC says crypto mining devices are securities,” which drew considerable attention before the post was deleted. The claim was quickly debunked by Neeraj Agrawal, communications director at the crypto advocacy group Coin Center, who reassured the community, stating, “This is wrong. Remain calm. This has no bearing on managed crypto mining. It’s garden variety ‘cloud mining’ scamming.”
What’s Next for Green United?
While Green United’s lawyers may continue to challenge the SEC’s claims, the case sets an important precedent in the battle against fraudulent crypto mining schemes. Investors have been left in the lurch, with many wondering if they’ll ever recover their funds.
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One notable aspect of the case is the judge’s omission of any mention of the actual S9 Antminers or bitcoin in her ruling. While the SEC’s allegations point to a clear misuse of funds for personal mining operations, the details of how the proceeds were managed and whether any further bitcoin transactions occurred remain shrouded in mystery.
As the case against Green United unfolds, it serves as a stark reminder of the risks associated with crypto investments, particularly in schemes promising unrealistic returns. With the trial now moving forward, both the legal and crypto communities will be watching closely for any developments. Investors are advised to remain cautious and conduct thorough due diligence before engaging in any cloud mining or crypto-related investments.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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