Court dismisses appeal in $18M crypto fraud lawsuit

A Utah federal judge has denied an appeal by Kristoffer Krohn to dismiss the SEC’s lawsuit against him, which alleges his involvement in an $18 million cryptocurrency fraud scheme.

The decision, delivered by Judge Ann Marie McIff Allen on Nov. 26, affirms her previous ruling, allowing the SEC case against Green United LLC to proceed.

In her written order, Judge Allen stated that Krohn failed to provide adequate grounds for an interlocutory appeal.

“The Court declines to certify this case for interlocutory appeal because Mr. Krohn has not shown any substantial ground for difference of opinion as to the controlling law governing any matter the Court addressed in its Sept. 23 Order,” she wrote.

Krohn had argued that the SEC did not establish that the “Green Boxes” offered by Green United were investment contracts under the Howey test.

He also claimed that the court’s interpretation of securities definitions was flawed.

However, Allen rejected these arguments, asserting that Krohn’s claims were unsupported by legal precedent.

The SEC alleges that between 2018 and 2022, Green United executives, including Krohn, raised $18 million by selling “Green Boxes” and “Green nodes,” which were falsely marketed as mining equipment for a non-existent Green Blockchain and GREEN tokens.

The regulator claims that the GREEN tokens were created only after initial hardware sales and distributed to mislead investors into believing the operation was successful.

The lawsuit further states that the equipment primarily mined Bitcoin, contrary to the company’s claims.

Investors were reportedly promised substantial returns as GREEN tokens were expected to increase in value due to Green United's efforts.

Green United founder Wright Thurston has also filed a motion to dismiss the case.

Both motions to dismiss have been met with significant resistance from the court.

The lawsuit remains ongoing.