• SEC says crypto mining devices are securities in its ongoing lawsuit against Green United
• A federal court ruled that crypto mining boxes were securities, agreeing with the SEC’s stance
• The SEC alleged Green United committed fraud by selling unregistered mining rigs with false promises about a token called GREEN
The US Securities and Exchange Commission (SEC) has ruled that crypto mining devices qualify as securities. This ruling came as part of an ongoing lawsuit against crypto company Green United.
Background on the Green United Lawsuit
In March 2021, the SEC filed a lawsuit against Green United for allegedly running an $18 million fraud scheme involving the sale of Bitcoin mining rigs. Specifically, the SEC claimed that Green United made fraudulent promises to investors about digital tokens called GREEN that would be mined using the rigs.
However, Green United disputed that its crypto mining boxes were securities. Unfortunately for the company, a federal judge has now sided with the SEC.
Federal Court Agrees Mining Boxes Are Securities
In the ongoing legal battle with Green United, a federal court judge has denied Green United’s motion to dismiss the case. The judge agreed with the SEC that the agency had sufficiently alleged that the Green Boxes qualify as investment contracts.
According to the court’s reasoning, the combination of the computer hardware and hosting agreements to operate the rigs amounts to an investment contract. Therefore, the mining boxes meet the criteria to be considered securities.
This ruling reinforces the SEC’s aggressive stance that many crypto assets fall under securities regulations. As the regulatory environment continues to evolve, more companies in the digital asset space can expect legal battles with the SEC. For now, the agency is firmly on the offense with its enforcement actions.
