Ethereum

United

Bitcoin

Green

<ul>
 <li>SEC charges Green United LLC with fraudulently raising $18 million from sales of unusable crypto mining equipment.</li>
 <li>Court supports SEC, allowing the lawsuit to proceed and classifies the sold products as securities.</li>
</ul>
Green United LLC, a company previously known for offering cryptocurrency mining equipment to U.S. residents, finds itself in a precarious legal battle with the SEC. The company allegedly engaged in a scheme to defraud investors by selling hardware for a digital token, identified as GREEN, that, in reality, could not be mined. This development follows a year-long investigation by the <a href="https://www.ethnews.com/sec-pushes-back-on-blackrock-ethereum-etf-approval-amid-falling-market-interest/" rel="noopener noreferrer nofollow">SEC</a>, culminating in a lawsuit that has now received judicial endorsement to continue.
On September 23, Judge Ann Marie McIff Allen ruled that the SEC had sufficient grounds to pursue its case against Green United. The company attempted to dismiss the lawsuit, arguing that the SEC lacked authority over the cryptocurrency industry. However, the court’s decision affirms the regulatory body’s right to enforce U.S. securities laws in the realm of digital assets.
The crux of the SEC’s case hinges on the promotional activities of Green United. The company is accused of misleadingly collecting $18 million from American investors by offering them what were labeled as “Green Boxes” and “Green Nodes.” These devices were marketed as capable of mining the GREEN token within a decentralized and environmentally friendly network. However, the reality unfolded quite differently.
According to the <a href="https://www.ethnews.com/blackrocks-ethereum-etf-waits-for-sec-hold-on-a-minute-lets-think-this-through/" rel="noopener noreferrer nofollow">SEC</a>‘s complaint, these devices were, in fact, non-functional for their stated purpose. They were purportedly used to mine another cryptocurrency, Bitcoin, without the investors’ knowledge, while the revenues from these sales allegedly went towards purchasing Antminer S9 devices, traditional Bitcoin mining equipment.
The GREEN token itself, as noted in the complaint, is based on the Ethereum network, which employs a staking model rather than mining to validate transactions and generate new ether (ETH). This fundamental misunderstanding or misrepresentation by Green United was central to the SEC’s argument.
The devices sold by Green United were thereby deemed as “investment contracts” by the court, which places them squarely within the realm of securities as defined by U.S. law. An investment contract implies an expectation of profits derived principally from the efforts of others, a cornerstone concept in securities regulation.
In addition to pursuing a permanent injunction against Green United to prevent future unregistered securities offerings, the SEC seeks disgorgement of all ill-gotten gains, prejudicial interests, and civil penalties from the company.
The broader implications of this case extend beyond just Green United. The designation of cryptocurrency-related instruments as securities is a contentious issue, bringing with it significant regulatory and operational implications for the entire blockchain and cryptocurrency industries. This case serves as a stark reminder of the ongoing challenges and legal complexities facing companies operating within the digital asset space, emphasizing the necessity for clear, compliant conduct in the burgeoning field of <a href="https://www.ethnews.com/bitcoins-beacon-empowering-haitis-economy-amidst-crisis/" rel="noopener noreferrer nofollow">cryptocurrency</a>.
The post <a href="https://www.ethnews.com/green-united-llc-faces-sec-lawsuit-for-alleged-fraud-in-crypto-mining-equipment-sales/" rel="noopener noreferrer nofollow">Green United LLC Faces SEC Lawsuit for Alleged Fraud in Crypto Mining Equipment Sales</a> appeared first on <a href="https://www.ethnews.com" rel="noopener noreferrer nofollow">ETHNews</a>.

Green United LLC Faces SEC Lawsuit for Alleged Fraud in Crypto Mining Equipment Sales

ETHNews

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