US SEC files a lawsuit against Green United alleging that the firm sold fake crypto mining gear

Updated: 07 March 2023

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The US SEC continues its crypto crackdown, this time by targeting a Utah-based company called Green United. According to the Securities and Exchange Commission, the firm has violated federal securities laws by selling fake crypto equipment. In its complaint, the SEC noted that the company sold $18 million worth of phony mining gear.

SEC charges Green United with running $18 million crypto mining scam

— Abner (@Abner6935) March 7, 2023

The regulator sued the company, as well as two individuals tied to it — Wright Thurston, a 46-year-old who founded the firm, as well as Kristoffer Krohn, a 43-year-old who acted as the firm’s main promoter. Both Utah residents, the pair offered investments in so-called Green Boxes — $3,000 specialized cryptocurrency mining machines, that purported to mine GREEN tokens, running on the Green Blockchain.

The pair claimed that investors would be able to mine GREEN tokens, and in doing so, support the public global decentralized power grid. Along the way, they would also generate 40% to 50% monthly returns. However, the investors were also informed that the success of the investment depends on the company maintaining control of the Green Boxes. The Green Boxes would be remotely hosted at the company-owned data center, they claimed, while those who purchased them would regularly receive payments in GREEN tokens.

Green United behind the scenes

After looking into the matter, the SEC found that GREEN tokens were never mined, because they cannot be mined. GREEN was never a mineable digital asset. In other words, the Green Blockchain doesn’t exist. The real GREEN tokens were created by Thurston on Ethereum’s network, and he then proceeded to distribute them to investors a few months after the pair started selling their fake machines, which was in April 2018.

https://twitter.com/MatthewPlomin/status/1632842472614133760

The regulator also noted that GREEN tokens never saw the promised increase in value, contrary to what the investors were told by Krohn when he was promoting the deal. Not only that, but the tokens were also not tradable on secondary marketplaces — at least not until two and a half years later, as they only reached the marketplaces in the fall of 2020. Even now, their price sits at $0.004, which is far below $0.2, which was the price that the investors were promised.

Instead, the SEC revealed that Green United’s real scheme was to trick investors into purchasing S9 Antminers, which were made to look like the so-called Green Boxes. The Antminers are actually bitcoin mining equipment but, naturally, the investors never received any bitcoin for their trouble.

Now, the regulator wants permanent injunctions against the company and the pair of scammers that led the project, in addition to civil penalties and disgorgement. However, interestingly enough, Krohn has had clashes with the SEC in the past — specifically in 2012. Back then, the regulator obtained injunctive relief against him, once again due to a federal securities laws violation.

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