Two individuals implicated in a dubious cryptocurrency mining scheme are fervently contesting a lawsuit filed against them by the Securities and Exchange Commission (SEC). They contend that the regulator lacks the jurisdictional scope to oversee cryptocurrency-related matters.
$18 Million Crypto Mining Scheme Comes Under Fire
At the heart of this legal battle are Wright Thurston and Kristoffer Krohn. They stand accused of orchestrating a fraudulent crypto mining operation to the tune of $18 million. In their latest move, both parties separately presented motions to dismiss the lawsuit filed by the American securities regulator. They argue the SEC does not possess authority over cryptocurrency-related activities.
The lawsuit emerged from the operations of Green United LLC, a company that purportedly specialized in crypto mining and development. The SEC claimed that this entity, co-founded by Thurston and commercially endorsed by Krohn, deceitfully offered securities by selling products termed “Green Boxes” and “Green nodes”. These were presented to potential investors as miners for the GREEN token on an alleged “Green Blockchain.”
Thurston and Krohn, in their defense, raised questions about the SEC’s authority over digital assets. The duo cited Congressional considerations and outright rejections of the SEC’s jurisdiction over cryptocurrency. They additionally pointed out the SEC’s inconsistent approach towards defining cryptocurrency, evoking a sentiment that the regulator was resorting to “regulation by enforcement.”
The pair further argued, “The SEC has abandoned any effort at proposed legislation or rulemaking, opting instead to attempt to litigate its way to a coherent regulatory scheme.”
Defining Securities: A Central Issue in the Dispute
In another facet of their defense, Thurston and Krohn asserted that the SEC failed to demonstrate that the “Green Boxes” constituted securities offerings or “investment contracts.” This point was critical, as the SEC had earlier labeled these as such in its original complaint filed in March.
In its suit, the SEC alleged that the hardware sold by Green United was, in reality, Bitcoin mining rigs, rather than miners for the advertised GREEN token. Additionally, the regulator contended that the much-vaunted Green Blockchain did not exist. The supposed scheme had accumulated around $18 million, but according to the SEC, the investors did not receive any Bitcoin mined by Green United.
This lawsuit’s unfolding brings into focus the controversial and ever-evolving interplay between cryptocurrencies and regulatory bodies, the outcome of which will undoubtedly influence the future landscape of digital assets.
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