Judge denies appeal from promotor accused in $18M crypto fraud case

A Utah federal judge has declined an appeal to dismiss a Securities and Exchange Commission lawsuit against a promoter of an allegedly fraudulent crypto mining firm that carried out an $18 million scheme.

Judge Ann Marie McIff Allen on Nov. 26 denied Kristoffer Krohn’s request for an appeal against her Sept. 23 judgment to allow the SEC’s lawsuit against Green United LLC, saying Krohn failed to provide grounds for the 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,” the judge wrote.

In his argument to dismiss the suit, Krohn said the SEC had not established that the Green Boxes offered by Green United were investment contracts, as the regulator claimed in its complaint.

He also claimed the SEC had confused elements of the securities-defining Howey test.

Related: SEC has no authority over crypto, defendants argue in $18M fraud lawsuit

But Judge Allen said Krohn was mistaken in his arguments claiming he cherry-picked terms from two separate definitions and offered no “legal support to show any court has adopted the definition,” as he described it.

In 2023, the SEC accused Green United executives of operating a fraudulent crypto mining scheme that raked in $18 million from investors between April 2018 and December 2022 by selling investments in “Green Boxes” and “Green nodes” which the regulator said actually mined Bitcoin.

Green United founder Wright Thurston has also made a separate bid to dismiss the suit.

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