Green United Promoter Seeks Appeal in SEC’s $18 Million Crypto Mining Fraud Case

The promoter of Green United, Kristoffer Krohn, is seeking to appeal the Securities and Exchange Commission's (SEC) lawsuit alleging an $18 million crypto mining fraud. Krohn contends that the SEC misapplied securities laws, and he is asking a federal appeals court to clarify whether the buyers of the firm’s equipment were part of a "common enterprise" as defined under securities regulations.

Key Takeaways

• Kristoffer Krohn argues that the SEC's claims regarding the sale of securities are incorrect.
• A federal court previously dismissed Krohn's attempt to dismiss the SEC's lawsuit.
• The SEC alleges that Green United misled investors about its mining operations.
• Krohn's appeal could lead to a significant legal precedent regarding crypto regulations.

Background of the Case

In March 2023, the SEC filed a lawsuit against Green United, its founder Wright Thurston, and Krohn, accusing them of selling unregistered securities through their product known as "Green Boxes." The SEC claims that these boxes were marketed to investors with the promise of mining a token called GREEN on a non-existent blockchain, while in reality, they were used to mine Bitcoin.

Krohn's legal team argues that the SEC has not demonstrated that purchasers of the Green Boxes had any stake in the profits of Green United's operations. They assert that the buyers were simply acquiring high-powered computer hardware, not securities.

Legal Arguments

Krohn's appeal centers on the interpretation of what constitutes an investment contract in the context of cryptocurrency. He argues that the Tenth Circuit Court has yet to establish clear guidelines on this matter, which could lead to differing opinions among judges.

• Key Points of Krohn's Argument:
  1. The SEC's application of securities laws is flawed.
  2. Buyers of Green Boxes did not have rights to profits from Green United.
  3. The Tenth Circuit should clarify the legal definition of investment contracts in crypto.

Implications of the Appeal

If Krohn's appeal is successful, it could set a significant legal precedent regarding the SEC's authority over cryptocurrency transactions. The outcome may influence how similar cases are handled in the future, particularly as the regulatory landscape for digital assets continues to evolve.

Next Steps

Should the Tenth Circuit agree to hear the appeal, Krohn will have the opportunity to present his case before a panel of judges. This process could take several months, delaying any final resolution of the SEC's allegations against him and Green United.

As the case unfolds, it highlights the ongoing tension between cryptocurrency firms and regulatory bodies, as well as the need for clearer legal frameworks in the rapidly changing digital asset space.

Sources

• Green United promotor asks to appeal SEC’s $18M crypto mining fraud case, Cointelegraph.