A federal court has ruled that cryptocurrency mining “boxes” sold by Green United qualify as securities, rejecting the company’s attempt to dismiss a fraud lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
Court Rules Green United's Cryptocurrency Mining Devices Are Securities
Green United had argued that the mining hardware marketed as “Green Boxes” did not involve securities transactions. However, U.S. District Court for the District of Utah Judge Ann Marie McIff Allen sided with the SEC, stating that the agency “sufficiently alleges securities” in the case. The decision illustrates the SEC’s view that the combination of the Green Boxes and a hosting agreement to operate them constitutes an investment contract and therefore falls within the scope of securities regulation.
The SEC’s lawsuit against Green United centers on allegations that the company defrauded investors by selling mining hardware as part of a larger scheme. The SEC alleges that Green United marketed Green Boxes to customers with promises of significant returns from cryptocurrency mining. The court ruled that the SEC had sufficiently alleged that these transactions met the criteria for an investment contract as defined by the U.S. Supreme Court’s Howey test.
*This is not investment advice.