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SEC Accuses Crypto Firm of $18M Fraud: Regulation by Enforcement Diktat?

• The US Securites and Exchange Commission (SEC) has filed a lawsuit against Utah-based crypto-firm Green United for allegedly selling bogus crypto-mining equipment worth $18 million.
• Investors were promised returns of 40-50% monthly on their GREEN tokens. However, the so called Green Boxes were actually S9 Antminers – Bitcoin mining equipment and the Green Blockchain did not exist.
• The SEC is seeking permanent injunctions, disgorgement and civil penalties against Green United and the two individuals responsible for running it.

SEC Accuses Crypto Firm of Violating Securities Laws

The US Securities and Exchange Commission (SEC) has filed a lawsuit against Utah-based crypto-firm Green United for allegedly violating federal securities laws by selling bogus crypto-mining equipment worth $18 million in return for tokens.

Promises Made to Investors

Green United marketed these „Green Boxes“ as specialized cryptocurrency mining machines capable of mining GREEN tokens on the Green Blockchain. In return, investors were promised a 40-50% monthly return on their investments in GREEN tokens. They were also told that the success of their investments was contingent on Green United keeping control of the „Green Boxes“ hosted at its data center.

Reality Behind Promises

However, according to the SEC these machines never mined any GREEN tokens because they were not mineable crypto assets. Furthermore, there was no such thing as a “Green Blockchain” as it did not exist either; instead, GREEN tokens were created on the Ethereum blockchain several months after investors purchased them in April 2018.

How Funds Were Used

The complaint further states that a significant portion of funds raised from investors was used to fund operational and promotional activities of Green United rather than improving investor returns. The value of GREEN tokens never increased either; they could only be traded on secondary markets from fall 2020 onwards at prices drastically lower than what had been initially promised (two cents per token).

Seeking Penalties Against Individuals Responsible

The SEC is now seeking permanent injunctions, disgorgement and civil penalties against both Green United and two individuals responsible for running it: its founder and main promoter