The US Securities and Exchange Commission (SEC) has filed a complaint against Utah-based Green United for allegedly running an $18 million cryptocurrency mining scam. The authority claims that the company offered mining contracts, promising investors outsized profits through mining and trading activities, but instead used investors’ funds to pay prior investors and fund the lavish lifestyle of the company’s founder.
The SEC has been taking a more proactive approach toward the regulation of the cryptocurrency industry in recent years. As the industry has grown in size and popularity, so too have the number of fraudulent schemes and scams. The SEC’s enforcement actions against companies like Green United serve as a warning to others in the industry that they must adhere to regulatory requirements or face legal consequences. The cryptocurrency industry is still largely unregulated, and investors must be cautious of scams and fraudulent schemes.
The SEC’s Complaint Against Green United
The SEC alleges that Ryan Alexander Black, the founder of Green United, defrauded at least 400 investors between 2017 and 2022. The complaint claims that Black raised approximately $18 million by offering investors contracts to mine cryptocurrencies, promising them up to 15 times their investment in profits. However, the company never conducted any mining activities, nor did it generate any profits from trading activities. The SEC further alleges that Black used investor funds to pay prior investors and fund his luxurious lifestyle.
According to the regulating authority, the fraudulent mining scheme targeted vulnerable investors by promising high returns with low risks. Green United and Duffield allegedly provided misleading information to investors about the company’s operations and profitability. The SEC alleges that the company used investors’ funds to pay earlier investors and to support Duffield’s lavish lifestyle, including purchasing luxury vehicles and jewelry. The SEC is urging investors to be cautious of fraudulent investment schemes that promise high returns with low risks, as they are often too good to be true.
Consequences for Green United
The SEC is seeking to halt Green United’s operations and obtain disgorgement of ill-gotten gains, prejudgment interest, and civil penalties from the company and Black. The SEC’s action is part of a broader effort by the agency to crack down on fraudulent cryptocurrency schemes. In recent years, the regulator watchdog has taken action against several other cryptocurrency companies and individuals.
Moreover, the authority is seeking permanent injunctions against Green United and Duffield, as well as civil penalties and disgorgement of allegedly ill-gotten gains. The complaint also states that the scheme violated federal securities laws by failing to register with the authority or qualify for an exemption from registration.
The cryptocurrency market’s lack of regulatory oversight has made it easier for fraudsters to scam unsuspecting investors. The SEC’s action against Green United serves as a reminder of the importance of regulatory oversight in the cryptocurrency market. Investors should conduct thorough due diligence and seek out information from reputable sources before investing in any cryptocurrency project. Additionally, investors should be wary of promises of outsized profits, as these are often red flags of fraudulent schemes.
The SEC’s action against Green United underscores the risks that investors face when investing in cryptocurrency-related projects. It is essential that regulators take steps to protect investors from fraudulent schemes. Investors must also exercise caution and due diligence when investing in cryptocurrency-related projects to avoid falling victim to scams. As the market continues to grow, regulatory oversight will become increasingly important to protect investors from fraudulent activities.