SEC Accuses Utah Firm of $18M Crypto Mining ‚Fraud‘ Scheme

Summary

• The US Securities and Exchange Commission (SEC) has filed a complaint against Green United LLC, its founder Wright Thurston, and contracted promoter Kristoffer Krohn for offering securities in the form of $3,000 „Green Boxes“ and „Green nodes“ purported to mine the GREEN token on the „Green Blockchain“.
• The SEC alleges that these offerings were fraudulent as the hardware sold didn’t mine GREEN as it was an Ethereum-based ERC-20 token that could not be mined and the Green Blockchain didn’t exist.
• The real scheme, according to the SEC, was using the funds to buy S9 Antminers — Bitcoin BTC $22,268 Bitcoin -1.05% MARKET CAP$430.02bVOL. 24H$769.90m BTC $34.49k mining rigs — which were passed off as the Green „boxes“ and „nodes“ to investors.

Details of Allegation

The United States Securities and Exchange Commission said Green United’s operation was a fraud, with the community quick to quell fears of the SEC classing crypto mining as a security. The regulator filed a complaint in a Utah District Court on March 3 against Green United, its founder Wright Thurston, and contracted promoter Kristoffer Krohn alleging that they offered securities between April 2018 and December 2022 by selling investments in $3,000 “Green Boxes” and “Green nodes” purported to mine the GREEN token on “Green Blockchain”. Investors were told that this would increase their return up to 50% per month.

Reality of Scheme

However, what investors were promised is not what happened in reality. The actual scheme according to SEC’s complaint was using investor money to buy S9 Antminers—Bitcoin mining rigs—which were then passed off as “green boxes” or “green nodes” while they only mined Bitcoin instead of GREEN tokens that investors weren’t receiving anyway because Ethereum-based ERC-20 tokens can’t be mined on any blockchain yet due to lack of technical capabilities. Furthermore, there wasn’t even any existing Green Blockchain so it was impossible for anyone investing in this project get anything out of it whatsoever except losses from their investment money going into someone else’s pocket without them ever seeing any returns like originally promised .

Misinterpretation by Crypto Community

The crypto community took one interpretation from this case where it seemed like SEC was going after crypto miners arguing that selling miners or offering hosting for them is a securities investment contract but Timothy Peterson argued against this interpretation saying that this case does not target mining in general but rather targets frauds related specifically with GREEN tokens which falsely claimed returns up until 50% per month when there wasn’t even any existing blockchain for those tokens .

Conclusion

In conclusion , investing always carries some risk associated with it but if done right can give you big returns but buyers must beware before investing anywhere especially if there are too good claims being made with no proof backing those claims up . This should have been obvious with Green United’s scheme because if you think about it , how can something offer such high rewards so quickly without taking into account all factors involved? It’s best practice for potential investors to research thoroughly before making any investments into new projects so they don’t end up having their hard earned money stolen from them .