Wright Thurston, Kristoffer Krohn, and Green United LLC face allegations from the SEC for an $18 million fraudulent cryptocurrency mining scheme.
The SEC claims they offered securities through the sale of "Green Boxes" and "Green nodes." The defendants seek dismissal, arguing the SEC lacks authority over the cryptocurrency industry. The SEC claims that they sold "Green Boxes" and "Green nodes" as miners for the GREEN token on the "Green Blockchain."
Thurston and Krohn want the lawsuit dismissed, arguing that the SEC does not have the authority to regulate cryptocurrencies. They say that Congress has already rejected the SEC's jurisdiction over this industry. They also criticize the SEC for being unclear and inconsistent in defining cryptocurrencies, accusing the regulator of using enforcement rather than proper legislation to create regulations.
In their defense, Thurston and Krohn argue that the SEC has not shown enough evidence that the "Green Boxes" were securities or investment contracts, as claimed in the SEC's complaint. The SEC alleges that the hardware sold by Green United as Bitcoin mining rigs did not actually mine the GREEN token as promised, and the associated blockchain was non-existent. The SEC states that the scheme raised around $18 million, but investors did not receive the Bitcoin they were supposed to get.
SEC Chair's Authority Challenged in Lawsuit: Cryptocurrency Regulations at Stake
SEC Chair Gary Gensler believes that the SEC has authority over most cryptocurrencies, except for Bitcoin, which he considers a security based on the Howey test. However, Thurston and Krohn's defense challenges the SEC's authority in this case. They argue that the SEC lacks a clear regulatory framework and is trying to establish one through litigation rather than proper rulemaking or legislation.
The outcome of the motions to dismiss will determine whether the lawsuit against Thurston, Krohn, and Green United will continue or be dropped. This case highlights the ongoing debate about the SEC's power over cryptocurrencies and the need for clear regulations in the rapidly evolving digital asset industry.
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