Will SEC Classify Crypto Mining As Unregistered Security?

• Through this crypto mining scam, Green United raised over $18M in more than 4 years.    
• The firm fraudulently offered its mining equipment – “Green Boxes” and “Green Nodes.”

Fraudulent crypto mining operations are in no way escaping the regulatory radar of the US Securities and Exchange Commission (SEC). On March 3, SEC filed a lawsuit against Utah-based crypto mining firm Green United LLC for raising over $18 million in a fraudulent sale of crypto mining equipment and assets to investors.

Reportedly, as per the filing, Green United and its representatives – founder Wright W. Thurston and promoter Kristoffer A. Krohn – generated the funds from April 2018 to December 2022 via this violating crypto mining scheme. The firm adopted false statements to sell its mining hardware – Green Boxes and Green Nodes – to investors with the fake offer of profits via the native token GREEN. 

Crypto Mining in SEC Lawsuit History

Notably, the firm promoted “GREEN” as a mineable crypto asset on native “Green Blockchain” with a pseudo-goal of becoming a “public global decentralized power grid.” Contrarily, GREEN was merely an ERC-20 token that was never mineable nor sold in any secondary markets. Moreover, Green Blockchain did not exist in real-time. The genesis of the GREEN token is reported to have begun after the delivery of the mining hardware. Also, the firm issued Bitcoin Antminers as mining machinery to certain investors.

As per SEC’s findings, the firm’s founder Thurston distributed these tokens to investors periodically with a manipulative price value. While, its promoter Krohn acted as an “unregistered securities broker” to falsify the token’s market value to investors. As a remedy to this violation, SEC appealed to the Federal Court to refrain Green United and its representatives from engaging in any crypto services.

The crypto community has begun storming the space with scrutiny against SEC’s attempt to extend its authority in this industry. Significantly, the SEC lawsuit against Ripple is a long-standing and one of the famous SEC cases. In Ripple CEO Brad Garlinghouse’s opinion, the XRP lawsuit is “pivotal for the crypto industry” and portrays the SEC’s unhealthy way of regulating the industry. 

Seemingly, its unhinted action against crypto mining is the unjust stance of the regulator. SEC’s recent enforcement actions worry the crypto miners as it hints at the possibility of labeling crypto mining as an unregistered securities offering.