The US Securities and Exchange Commission initiated charges against Utah-based Green United. The suit alleges the mining firm engaged in an $18m scam for a dishonest sale of equipment unable to mine.
The US watchdog agency confirmed filing suit against the Utah-headquartered Green United, citing it contravened federal securities laws. Documents filed before the court indicate that Green United allegedly sold phoney mining equipment with an estimated value of $18 million.
Disguised Fraudulent Mining Scheme
The complaint lodged by SEC identifies Green United and two individuals being its founder and promoter, as primary respondents. The suit alleges Wright Thurston as the firm’s co-founder, and Kristoffer Krohn, its primary promoter, offered $3000 Green Boxes for sale.
The offered investments involved specialized equipment capable of mining GREEN tokens within the Green Blockchain. The two individuals are accused of convincing investors that GREEN tokens would back the decentralized power grid. The investors would derive 40% – 50% of monthly earnings.
The complaint filed by SEC indicated that the Utah-based firm directed investors that the investments’ success relied upon Green United exercising control over the Green Boxes. Further, the firm indicated it would remotely host the mining equipment within its controlled data center.
Thurston and Krohn Duped Investors into Non-existent Tokens
The suit indicates that the defendants promised to distribute the GREEN tokens generated by the mining machines to respective investors. SEC reveals that the mining equipment never realized the GREEN since it was not a mineable digital asset. The regulatory agency argues that Green Blockchain was non-existent.
The suit reveals that the firm’s co-founder, Thurston, leveraged the Ethereum blockchain to create the GREEN tokens himself. The documents filed to the court demonstrate that Thurston would start the distribution of the GREEN tokens in April 2018, right after selling the mining equipment jointly with Krohn.
SEC complaint illustrated Krohn’s representation to the investors as deceptive that GREEN tokens would realize higher value. On the contrary, they proved nontradable within the secondary market till 2020 fall. Today, their exchange price is hovering around $0.004 against the projected value of $0.20 per token.
SEC Seeks Injunctions for Deceptive Promotion Tactics
SEC portrays the Green United scheme as duping investors into acquiring S9 Antminers. The bitcoin mining machines were disguised as the Green Boxes. While the mining equipment was functional, Thurston never distributed the bitcoin mined.
The submission by SEC petitions the court to issue permanent injunctions against Green United and the two co-accused. Besides, the regulatory agency seeks civil penalties and disgorgement.
The lawsuit by SEC alleging Krohn’s wrongdoing reincarnates a previous brush where in 2012 misrepresented an investment program involving real estate. SEC successfully secured injunctive relief against Krohn for his deceptive promotion tactics.
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