Utah Judge Rejects Appeal in $18M Crypto Fraud Case Against Promoter
A federal judge in Utah has denied an appeal by Kristoffer Krohn, the architect of an $18 million cryptocurrency fraud case involving Green United LLC. On November 26, Judge Ann Marie McIff Allen ruled that Crohn’s appeal of her previous decision to allow the Securities and Exchange Commission (SEC) to pursue legal proceedings had no merit.
Charges Against Green United LLC
The SEC charged Green United LLC with orchestrating a fraudulent scheme between April 2018 and December 2022. The company allegedly sells “green boxes” and “green nodes,” which are marketed as tools related to so-called “green blockchains.” Investors were led to believe that the devices would generate returns tied to a non-existent cryptocurrency called green tokens.
According to the SEC, the blockchain and tokens were forged after the devices were sold, making the entire operation deceptive and predatory.
Crohn’s defense stalls
Crohn’s defense argued that the SEC failed to prove that the sale met the definition of a security under the Howey test, the standard used to determine whether a transaction qualifies as an investment contract. However, Judge Allen rejected that argument, saying Crone had misinterpreted the law.
The court sided with the SEC, confirming that the sales of the equipment and tokens constituted investment contracts and were therefore subject to securities regulation.
Motion by co-defendant Wright Thurston
Wright Thurston, founder of Green United LLC, also filed a motion to dismiss the case. However, the SEC fired back, insisting that the company fraudulently created Green Blockchain and GREEN tokens after selling them, rendering investors’ assets worthless.
Regulation focuses on cryptocurrency fraud
The case highlights growing regulatory scrutiny of fraud within the cryptocurrency industry. It provides a warning to investors in unregulated securities, highlighting the risks of falling victim to schemes disguised as blockchain innovation.
As the legal battle continues, the SEC’s insistence on addressing this type of fraudulent activity demonstrates its commitment to protecting investors and maintaining transparency in the growing crypto industry.
