SEC Sues Utah-Based Crypto Asset Company, Its Founder, and a Recidivist Salesperson for Fraud and Registration Violations
Litigation Release No. 25659 / March 8, 2023
Securities and Exchange Commission v. Green United, LLC, Wright W. Thurston, and Kristoffer A. Krohn, No. 2:23-cv-00159 (D. Utah filed March 3, 2023)
The Securities and Exchange Commission charged Utah-based company Green United, LLC, its founder Wright W. Thurston, and one of its promoters, Kristoffer A. Krohn, with allegedly defrauding investors in connection with an unregistered offering of crypto asset securities.
According to the SEC's complaint, from April 2018 until at least December 2022, Thurston and Green United, LLC, d/b/a "Green" or "Set Power Free," raised at least $18 million in the unregistered offer and sale of investments they called "Green Boxes" or "Green Nodes," leading investors to believe that those products mined a digital token they called GREEN on a purported "Green Blockchain." As alleged in the complaint, investors were led to believe that and that the value of GREEN could increase if Green United succeeded in creating a "public global decentralized power grid." In reality, as alleged in the complaint, the Green Boxes purchased by investors did not mine GREEN, but rather mined Bitcoin, which was not transferred to investors. Likewise, Green Nodes did not mine GREEN but, as alleged in the complaint, were a basic software that in no way generated GREEN. As alleged in the complaint, Thurston created the total supply of GREEN tokens in October 2018 through a smart contract on the Ethereum blockchain, and Green United distributed those GREEN tokens to investors wallets at Thurston's direction in order, as alleged, to create the appearance that GREEN was being mined. Additionally, the complaint alleges that from April through October 2018, SEC recidivist Krohn, whom Thurston recruited and paid commissions to promote and sell Green Boxes and whom the SEC alleges acted as an unregistered securities broker, made numerous misrepresentations to investors about the present value of the GREEN token and returns on investment that investors could anticipate.
The SEC's complaint charges Green United, Thurston, and Krohn with violating Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"); Green United with violating Section 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1834 ("Exchange Act"); Thurston with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) and Rules 10b-5(a) and (c) of the Exchange Act; and Krohn with violating Sections 17(a)(2) and (3) of the Securities Act and Section 15(a)(1) of the Exchange Act. The SEC seeks permanent and conduct-based-injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and penalties against all defendants. The complaint also names True North United Investments, LLC and Block Brothers, LLC as relief defendants.
The SEC's investigation was conducted by Laurie Abbott with the assistance of David Crosbie, and Donald Battle of the Division of Enforcement's Crypto Asset and Cyber Unit and Alex Lefferts of the Division of Enforcement's Office of Investigative and Market Analytics, and supervised by Tracy Combs. The litigation will be led by Michael Welsh and Casey Fronk.