As a seasoned researcher with extensive experience in the field of financial regulation and cryptocurrencies, I find myself intrigued by the ongoing legal battle between Green United and the Securities and Exchange Commission (SEC). The case revolves around allegations of an $18 million crypto mining fraud scheme, which is a significant development in the rapidly evolving world of digital assets.
The promotor of Green United, accused of taking part in an $18 million crypto mining fraud scheme, is vying to appeal his case, arguing the Securities and Exchange Commission should be forced to drop the suit as its argument that he allegedly sold securities is wrong.
On October 24, Kristoffer Krohn argued before a federal court in Utah that it’s up to the Tenth Circuit Court of Appeals to determine whether purchasers of the company’s equipment collectively participated in a shared venture (a “common enterprise”), as the SEC claimed the company was selling investment contracts in violation of securities laws.
In a different wording, “It’s wiser and more just to address this legal matter immediately by taking it to the Tenth Circuit for resolution, instead of making Krohn pay for the expenses of both the appeal process and trial first,” he proposed in his request for an interlocutory appeal.
In the previous month, Judge Ann Marie McIff Allen of the Utah District Court declined to dismiss the Securities and Exchange Commission’s (SEC) lawsuit against Krohn, Green United, and its founder Wright Thurston. She determined that the SEC had provided sufficient evidence to allege that Green Boxes, as sold by the firm, were unregistered securities. As a researcher studying this case, I find it intriguing how the judge’s decision could impact the outcome of the ongoing legal battle.
As a researcher delving into the intricacies of the cryptocurrency sphere, I’ve noticed that several digital asset companies operating within the United States have found themselves in hot water with the Securities and Exchange Commission (SEC). The SEC has levied accusations against these firms for selling securities without proper registration. This determination is based on the Howey test, a legal benchmark used to identify transactions that constitute securities.
In March 2023, I found myself ensnared in a legal dispute along with Green United, Thurston, and Krohn. The allegation was that we misled buyers of the “Green Box” by promising it would mine the GREEN token on the “Green Blockchain.” However, it was claimed that no such mining operation or blockchain ever existed. Instead, it was asserted that the money invested was used to purchase Bitcoin (BTC) mining rigs, which we failed to deliver to the investors.
In a statement made during his appeal attempt, Krohn explained that the Securities and Exchange Commission (SEC) did not and does not claim that buyers of Green Box had any claim to the earnings or ownership shares in Green United’s business activities.
“The fact that Green Box purchasers were not offered the opportunity to share in Green United’s profits underscores that Krohn was simply selling high-powered computer hardware, not a security.”
He added the Tenth Circuit is yet to develop a “clear, binding law” over what an investment contract is in the context of crypto
In Krohn’s argument, he suggested that while some judges may agree that the Securities and Exchange Commission (SEC) adequately alleged an investment contract based on the facts presented in the amended complaint, other reasonable judges might disagree due to the early stage of development of the technology at hand in this specific case.
Should Krohn prevail, he will have the opportunity to present his arguments to a panel of three appeal judges. This process might stretch over several months until a verdict is reached.
In their dismissal requests made in May, Krohn and Thurston contended that the Securities and Exchange Commission (SEC) lacked jurisdiction over cryptocurrencies, citing that Congress had previously declined to grant such authority to the SEC in this domain.
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2024-10-28 09:22