SEC Lawsuit Against GreenUnited Raises Concerns Over Crypto Mining Equipment Sales

According to Odaily, the U.S. Securities and Exchange Commission (SEC) has recently filed a lawsuit against the cryptocurrency company GreenUnited, drawing significant attention within the industry. The SEC accuses GreenUnited of defrauding investors of $18 million through the sale of so-called 'GreenBoxes' mining equipment. Last week, a federal judge dismissed GreenUnited's motion to dismiss the case, sparking speculation on social media about the potential classification of crypto mining hardware sales as securities. However, several legal experts have indicated that there is no immediate cause for alarm. Ishmael Green, a partner at DiazReus law firm, emphasized that as long as mining equipment is sold with the understanding that the end user will conduct the mining, there should be no issues. 'In the GreenUnited case, the sales agreement for the mining equipment stated that GreenUnited would control and operate the system, which is the crux of the problem,' Green explained. Hadas Jacobi, a consultant at ReedSmith law firm, noted that while the SEC has not explicitly mentioned custodial mining, this case could have implications for custodial mining services. Despite GreenUnited's attempts to portray the case as a misunderstanding by the SEC regarding custodial mining, the judge denied their motion to dismiss. Currently, the judge has only decided to proceed with the case and has not yet ruled on the SEC's arguments. The outcome of this case could have significant ramifications for the crypto mining industry, particularly regarding how mining equipment sales are regulated and perceived by authorities.