Court rules Green United mining devices are securities, upholding SEC
Date: 2024-10-02 Author: Henry Casey Categories: BUSINESS
A U.S. court has ruled that mining devices sold by Green United are securities, upholding allegations by the U.S. Securities and Exchange Commission (SEC). According to Bloomberg Law, Green United failed to convince a federal court to dismiss a civil lawsuit by the SEC that accused the company of defrauding investors.
The SEC's lawsuit alleges that the mining equipment, called "Green Boxes," was actually part of a securities transaction.
The nature of the fraud
In March 2023, Utah-based Green United was suspected of fraud. The SEC filed charges of violating securities laws and selling fictitious assets worth $18 million. The company was founded by Wright Thurston and Christopher Crone, who advertised their business as “green mining.”
They offered investors to buy mining equipment with the promise of a return of up to 50% per month, with a minimum investment of $3,000. However, the SEC concluded that the company was never engaged in “green” mining, as it claimed to its clients. In fact, investors' funds were used to mine bitcoins, and the profits were appropriated by the company's management.
SEC Clarifies the Definition of Securities for Cryptocurrencies
The SEC also indicated that Green United sold its equipment with hosting agreements, where the company managed the devices on behalf of investors and promised them significant profits. However, instead of the promised mining, Green United bought unmined tokens and credited them to clients' accounts, creating the appearance of successful mining.
The Utah District Court, presided over by Judge Anne Marie McIffe Allen, upheld the SEC's position, agreeing that the company defrauded investors and raised $18 million by selling fictitious assets. The commission argues that the mined GREEN tokens had no real value.
