Green United LLC failed to persuade a federal court to toss an SEC civil fraud suit against it on grounds that its cryptocurrency mining “box,” or hardware, customers didn’t enter into securities transactions with it.
The Securities and Exchange Commission “has sufficiently alleged a security in the form of Green Boxes (computer hardware) coupled with a hosting agreement to operate the Green Boxes,” Judge Ann Marie McIff Allen said for the US District Court for the District of Utah.
The inquiry is distinct from whether digital assets themselves—and transactions involving them—satisfy the test for investment contracts under the US Supreme Court’s 1946 opinion SEC v. W.J. Howey Co. and are therefore securities. The crypto industry has been litigating that issue in numerous cases.
The SEC says that Green United’s mining equipment and software didn’t actually mine digital tokens as promised to investors who entrusted…
