The U.S. Securities and Exchange Commission (SEC) has uncovered an elaborate $18 million crypto mining fraud perpetrated by the Utah-based firm Green United LLC and its promoters. In what has been described as a “fraudulent scheme,” Green United representatives Wright Thurston and Kristoffer Krohn allegedly sold phony crypto mining equipment and fabrications of a lucrative “Green Blockchain” purporting to pay returns up to 50% per month.
It’s been revealed that while investors were told their investments would support a “public global decentralized power grid” and earn the coveted GREEN token, these guarantees were nothing more than hot air. The SEC found that the hardware sold didn’t mine GREEN, as it was an Ethereum-based ERC-20 token that couldn’t be mined, and the Green Blockchain didn’t exist at all.
In reality, the funds were used to buy S9 Antminers – Bitcoin (BTC) mining rigs, which were passed off to investors as the Green “boxes” and “nodes.” Furthermore, GREEN tokens were only created “several months” after the first hardware sales, and were periodically distributed to “create the appearance of a successful mining operation.”
The crypto community has since been trying to distance itself from the fraudulent scheme and recognize it as a particular offender in the crypto world, rather than a blanket statement regarding crypto mining. Timothy Peterson, crypto advocate and investment advisor, argued the interpretation was a “bad take” while noting that the case doesn’t “target mining in general.”
For its part, the SEC has asked for a court order to shut down Green United, along with civil penalties for the individuals responsible for the scam and a restitution of the $18 million in allegedly ill-gotten profits. Dennis Porter, CEO of the Bitcoin advocacy group the Satoshi Action Fund, provided the following statement regarding the incident:
“The SEC is not coming after mining, so don’t be worried. The action is specific to the parties involved here, a scam disguised as mining. Regulations exist to protect all parties, but there must be accountability for misleading practices and criminal actions.”
This case serves as a reminder that caution should be exercised when investing in the crypto world. Always make sure to thoroughly research any proposed investment before committing any money. As with any unregulated sector, buyers should do their due diligence prior to engaging in any such activity and should never invest more than they can afford to lose.