Green United is accused of having sold investors cryptocurrency mining hardware that didn’t produce the output the company stated it did.
- Investors were allegedly sold $3,000 in “Green Boxes” by Green United that were meant to mine GREEN tokens on the Green Blockchain.
- Investors were allegedly duped into purchasing bitcoin mining equipment by Green United, which produced bitcoin that investors did not get.
- Green United is the target of a permanent injunction request from the SEC.
SEC’s Lawsuit
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Green United, saying that the Utah-based business sold fake cryptocurrency mining equipment worth $18 million in violation of federal securities laws.
The SEC filed a complaint alleging that Green United and two people, including the company’s founder Wright Thurston, 46, and its chief promoter Kristoffer Krohn, 43, offered investments in $3,000 “Green Boxes,” specialized crypto mining devices that claimed to mine GREEN tokens on the Green Blockchain. Investors were purportedly informed that the GREEN tokens mined generated a handsome 40% to 50% monthly return while supporting a “public worldwide, decentralized power infrastructure.”
The Scam
Investors were allegedly informed that Green United’s ability to keep control over their “Green Boxes,” which would be remotely hosted at a Green United-controlled data center, was essential to the success of their investments. Investors would receive GREEN tokens produced by their equipment.
However, the SEC claims that Green United’s mining equipment never mined GREEN because it was not a crypto asset that could be mined, and there was no such thing as a “Green Blockchain” at the time. Instead, Thurston allegedly minted GREEN tokens on the Ethereum blockchain and distributed them to investors’ wallets “many months” after he and Krohn started selling the devices to investors in April 2018.
Additionally, the SEC asserts that the value of GREEN tokens remained the same, in contrast to what Krohn purported to have told Green United’s investors. The current $.004 is much lower than the stated starting value of 2 cents per token, as they were marketable in the fall of 2020.
The SEC claims Green United’s underlying plan was to con investors into purchasing S9 Antminers, which is bitcoin mining equipment disguised as “Green Boxes.” The purchases made by the investors served a purpose and “mined [bitcoin], which the investors did not receive.”
Along with disgorgement and civil penalties, the SEC requests permanent injunctions against Green United, Thurston, and Krohn. Krohn’s run-in with the SEC before the lawsuit is not new. Due to false statements the promoter made in connection with a real estate investment scheme, the SEC was able to win injunctive action against him in 2012.
Further Action Against BKCoin
Regulators claim that BKCoin and Kang raised $100 million from more than 50 investors and used some money for “Ponzi-like payments” and personal expenses.
According to the SEC, BKCoin and Kang assured investors that their money would be housed in independently managed accounts and utilized to trade cryptocurrencies. However, it is claimed that Kang and BKCoin mixed customer funds and spent at least $3.6 million to pay other investors.
Five months ago, BKCoin Management LLC, the primary legal entity of BKCoin, filed a lawsuit in a Florida circuit court, saying that Kang had “improperly diverted” $12 million in cash and other assets from BKCoin’s multi-strategy funds. The SEC’s action now follows. On October 14, Kang was fired from BKCoin.
