The U.S. Securities and Exchange Commission (SEC) has filed suit against Green United, alleging the Utah-based company violated federal securities laws by selling $18 million worth of phony crypto mining equipment.
According to the SEC’s complaint, Green United and two individuals – the company’s founder, 46-year-old Utah resident Wright Thurston, and its main promoter, 43-year-old Utah resident Kristoffer Krohn – offered investments in $3,000 “Green Boxes,” specialized crypto mining machines that purported to mine GREEN tokens on the Green Blockchain.
Investors were allegedly told that the GREEN tokens mined supported a “public global decentralized power grid” – all while generating a handsome 40% to 50% monthly return.
Investors were also allegedly told the success of their investments depended on Green United maintaining control of their “Green Boxes,” which would be remotely hosted at a Green United-controlled data center. GREEN tokens generated by their machines would be distributed to investors.
However, according to the SEC, Green United’s mining machines never mined GREEN, because GREEN was not a mineable crypto asset and the so-called Green Blockchain didn’t exist. Instead, Thurston allegedly created GREEN tokens himself on the Ethereum blockchain and distributed them to investors’ wallets “several months” after he and Krohn started selling the machines to investors in April 2018.
In addition, contrary to Krohn’s representations to Green United’s investors, the SEC alleges that GREEN tokens never increased in value. They were not tradable on a secondary marketplace until the fall of 2020 – and the current price of $.004 is far below the promised initial value of 2 cents per token.
Green United’s real scheme, according to the SEC, was to dupe investors into buying S9 Antminers – bitcoin mining equipment – dressed up as “Green Boxes.” The investors’ purchases were functional, and “mined [bi]tcoin, which the investors did not receive.”
The SEC is seeking permanent injunctions against Green United, Thurston and Krohn, as well as disgorgement and civil penalties.
The suit is not Krohn’s first brush with the SEC. In 2012, the SEC obtained injunctive relief against the promoter for violating federal securities laws “due to misrepresentations he made in connection with a real estate investment program.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish, a cryptocurrency exchange, which in turn is owned by Block.one, a firm with interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets including bitcoin and EOS. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.