Green United $18M Crypto Fraud: Court Rejects Appeal, SEC Case to Continue

A federal judge in Utah has dismissed an appeal by Kristoffer Krohn, a promoter involved in an $18 million cryptocurrency fraud case linked to Green United LLC. On November 26, Judge Ann Marie McIff Allen ruled that there was no solid basis for Krohn’s challenge against her earlier decision, which allowed the U.S. Securities and Exchange Commission (SEC) to move forward with its legal action.

This ruling marks a key moment in the case as the SEC continues to crack down on fraud in the crypto industry.

The Green United Fraud

The SEC has accused Green United LLC of orchestrating a fraudulent scheme from April 2018 to December 2022. The company allegedly sold “Green Boxes” and “Green Nodes,” which were marketed as tools tied to a purported “Green Blockchain.” Investors were led to believe these devices would generate returns linked to a non-existent cryptocurrency called GREEN tokens.

According to the SEC, the blockchain and tokens were created only after the devices had already been sold, making the entire operation misleading and deceptive.

Krohn’s Defense Rejected by the Court

Krohn’s defense argued that the SEC had failed to prove the sales of the devices and tokens met the definition of securities under the Howey Test, a standard used to determine whether a transaction is an investment contract. However, Judge Allen rejected this argument, siding with the SEC.

The court ruled that the sale of the devices and tokens did indeed qualify as investment contracts and, therefore, fell under U.S. securities regulations.

Founder Wright Thurston Fights Back

Wright Thurston, the founder of Green United LLC, has also filed a motion to dismiss the case. However, the SEC is standing firm, arguing that the company fraudulently created the Green Blockchain and GREEN tokens after the sale of the devices, leaving investors with worthless assets.

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