Green United’s $18 million crypto mining fraud case dismissed
Green United LLC has lost its bid to dismiss a lawsuit from the U.S. Securities and Exchange Commission, which accused its executives of operating a fraudulent crypto-mining scheme that bilked investors of $18 million.
The defendants, Wright Thurston and Christopher Crone – who ran the cryptocurrency mining company Green United LLC – were accused by the SEC of fraudulently selling “green boxes” and “green nodes” on the “green blockchain” marketed for green tokens. He said.
In a Sept. 23 decision, Judge Ann Marie McKeefe Allen said the defendants had failed to rebut the SEC's securities claims, saying “the SEC has adequately alleged all of the necessary security elements in the investment contract.”
Judge Allen declined to dismiss the SEC's fraud claims against Thurston, saying his actions created the “illusion” that investors were earning green tokens by mining them.
“Actually, they only received greens at Mr. Thurston's request to distribute them to investors, allegedly based on how many green boxes they contained.
“[This] Green Box is a deceptive practice to promote fraud.
Excerpts from defendants' motion to dismiss. Source: PACER
The SEC also said that the hardware sold by Green United used Bitcoin (BTC) mining machines that did not mine GREEN as advertised and that the blockchain never existed.
The alleged scheme raised approximately $18 million and investors “refused to receive” bitcoin buried by Green United, the SEC said.
In their motion to dismiss, Thurston and Crone argued that the SEC has no jurisdiction over digital assets because Congress has already “considered and denied” its authority, and that such enforcement violates the Due Process Clause and the separation of powers under the U.S. Constitution. .
However, Judge Allen struck down this argument:
“This action does not present any new regulatory effort by the SEC. Rather, the SEC, in this action, is pursuing the goals of Congress set forth ninety years ago.
The SEC's lawsuit now moves to the next stage in the legal process, typically the discovery or trial stage.
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Thurston and Krohn filed a motion to dismiss the SEC's lawsuit on May 19.
Green United is based in Thurston, Utah, from April 2018 until at least December 2022, while Crone announced the plan through a contract.
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