- Allegedly, the Commission does not have the authority to regulate the cryptocurrency sector
- At the same time, the department did not provide evidence that Green Boxes is an investment product or contract.
In early March, the Securities and Exchange Commission (SEC) filed a lawsuit against Green United and two members of top management. The regulator accuses the firm of fraud. Allegedly, she used a “fake mining scheme” to promote investment products and deceive customers.
Recall that Green United offered its clients to invest in Green Boxes and Green Nodes. It was positioned as equipment for mining GREEN tokens in a specialized blockchain.
The cost of one such “box” was $3,000. At the same time, investors were guaranteed a profit of 40-50% monthly. The contributors themselves have never received equipment placed remotely under the control of the firm.
The SEC said the company violated securities laws. Allegedly, the firm organized a “fake mining scheme” to promote an investment product in the form of a GREEN token. In this case, in fact, the entire network created is a common fraud.
On May 19, two defendants in the case, Wright Thurston and Kristoffer Kron, filed a motion to dismiss the lawsuit. They argue that the SEC’s requirements are not valid. You can see the papers here And here.
Thurston and Krohn also state that Congress “considered and rejected” the powers of the Commission in the context of regulating the crypto-currency sector. In doing so, the SEC was allegedly “obscure and inconsistent” in taking action against the industry “by way of enforcement.”
Another argument of Thurston and Krohn is the ambiguity of the SEC’s position regarding those same “Green Boxes”. Allegedly, the regulator did not confirm in any way the fact that the “boxes” are an investment contract or a product.
