SEC Claims Utah Firm is Operating a ‘Fraudulent’ Crypto Mining Scheme
- The SEC has accused a Utah-based firm called Green United LLC and its founder, Wright W. Thurston, of operating a fraudulent scheme.
- The company, its founder, and its contracted promoter, Kristoffer A. Krohn, offered unregistered securities between April 2018 and December 2022.
- The firm raised close to $18 million via the sale of “Green Boxes” and “Green Nodes” and a part of the funds were used for promotion of the project.
- Investors were promised that “Green Boxes” and “Green Nodes” would mine the GREEN token, but the token was not a “mineable crypto asset.”
The United States Securities and Exchange Commission (SEC) has become increasingly aware of fraudulent crypto firms and schemes following the implosion of multiple crypto firms in 2022. Interestingly, the US securities market regulator has accused a Utah-based firm called Green United LLC, its founder Wright W. Thurston, and contracted promoter Kristoffer A. Krohn of perpetuating a “fraudulent offering of securities.”
According to a March 6 document, the complaint against Green United, Thurston, and Krohn was filed on March 3, wherein the regulator alleged that the two executives fraudulently offered unregistered securities between April 2018 and December 2022 by selling investments in $3,000 “Green Boxes” and “Green Nodes,” purportedly to mine the GREEN token on the “Green Blockchain.” The firm raised close to $18 million via their security offering.
“Defendants led investors to believe that Green United intended to develop the Green Blockchain to create a “public global decentralized power grid,” and, based on their efforts, that the GREEN token would therefore increase in value. As a result, purchasers of Green Boxes and Green Nodes reasonably would have expected to profit from their investment based on the entrepreneurial and managerial efforts of Defendants,” said the SEC.
The SEC noted that, in reality, the Green Boxes and Green Nodes purchased by investors were not capable of mining the GREEN token, which was based on the ERC-20 standard. This is because the regulator claims that the token is not a “mineable crypto asset.” The agency added in the complaint that in order to appear legitimate, the company distributed the GREEN token to the wallets of the investors in 2019.
In the document, the regulator stated that “these deposits of GREEN were not the result of mining, but instead were merely the result of distribution conducted at the direction of Thurston.” The regulator further added that the company and its founder used “at least a significant portion of the funds raised from investors to finance the company’s operations and promotional activities.”
Moreover, Thurston also recruited Krohn, who acted as an unregistered securities broker to promote and sell Green Boxes, the SEC noted.
“The Commission seeks a permanent injunction enjoining Defendants from engaging in the transactions, acts, practices, and courses of business alleged in this Complaint, and a conduct based injunction prohibiting Krohn and Thurston from participating, directly or indirectly, in any unregistered securities offering, including any crypto asset securities offering,” stated the agency.
The regulator seeks disgorgement of “all ill-gotten gains from the unlawful conduct” stated in the document, along with prejudgment interest, civil penalties, and other fines that the court may impose on the firm and its founder.
As reported earlier by BitcoinWisdom, the agency took emergency action against investment adviser BKCoin Management, which it said was linked to a fraud scheme. The regulator claims that BKCoin Management raised $100 million from up to 55 investors to invest in cryptocurrencies but instead spent the money on lavish purchases and “Ponzi-like payments.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
