Green United Mounted $18M Crypto Mining Scam: SEC files Suit

The SEC vs. Green United Mining Scam

The financial watchdog of the United States, the Securities and Exchange Commission (SEC), has been very strict lately with crypto entities. The complaint against Green United, along with its founder Wright Thurston and major promoter Kristoffer Krohn, says they offered investments in specialized crypto mining machines called “Green Boxes.” Worth $3,000 and claimed to be mining GREEN tokens on the Green Blockchain. 

Investors were told that the mined GREEN token supports a “public global decentralized power grid” along with a capacity of generating 40% to 50% returns per month. They were also told that the profits of their investment greatly depend on the situation where Green United maintains control of their “Green Boxes.” these boxes were hosted remotely at the company-controlled data center. Mined GREEN tokes would then be distributed among investors.

The SEC says that due to its inability to be mined, the Green Boxes never mined GREEN; moreover, the Green Blockchain never existed. Thurston is believed to have created these GREEN tokens on the Ethereum blockchain, distributed to investors’ wallets months later. Both the perpetrators began selling these duped machines to investors in April 2018. 

The SEC further mentions that, contrary to Green United’s representation, GREEN tokens’ value never increased. Moreover, these tokens were also not tradable in secondary marketplaces till 2020. 

The Master Plan – Green United

According to the SEC, the real master plan of Green United was to lure investors into buying S9 Antminers, which is a bitcoin mining equipment, decoyed as “Green Boxes.” The investors here purchased professional BBTC mining equipment and mined the cryptocurrency, but the investor did not receive anything in return. 

The SEC seeks a permanent injunction against Green United, Krohn and Thurston, disgorgement, and civil penalties.

For the promoter Kristoffer Krohn, this is not the first contact with SEC. in 2012; injunctive relief was obtained against the promoter for violating federal securities laws. This was because of misrepresentations concerning a real estate investment program.

Categories of Crypto Mining Scams

Scams in cryptocurrency mining are categorized into five types. Namely Crypto Jacking, Cloud Mining Scams, Fake Mining Pools, Faulty & Fake mining hardware and Mining Coins with exceedingly high rewards. 

Crypto Jacking Scam is using victims’ hardware for mining. Malware is installed via web download, e-mail attachments, phishing etc. After successful malware deployment, the scammer can use the device for mining without the victim’s knowledge. Cloud mining refers to paying a platform for mining on behalf, and a monthly fee is charged for equipment maintenance. Scammers would claim a healthy mining reward, while a mining infrastructure may not exist. 

Many miners often pool their resources to increase hash rates, increasing the chances of mining a block and earning rewards. Such pools can be joined with a membership fee. Fake mining pools would use victims’ money and hash rates without providing anything in return. 

Many websites offer fake or faulty mining equipment; they would attract miners by providing faulty physical devices or remotely operating them. The authenticity of these websites can be verified by checking the URL in the link checker. 

Victims are lured into mining coins with extremely high rewards for the coin, which may be practically at $0. such tactics invite numerous investors, thus increasing its price. The company gets high returns for victims’ efforts while they are left with minuscule rewards. 

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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