The post US Court Labels Crypto Mining Gear as Securities appeared on BitcoinEthereumNews.com.

A recent federal court ruling in the United States has classified cryptocurrency mining devices as securities, siding with the Securities and Exchange Commission (SEC) in their legal battle against Green United LLC. The SEC accused the company of fraudulent activities surrounding the sale of these mining devices, which it argued were part of a wider Ponzi scheme. What Did the Court Decide? Judge Ann Marie McIff Allen ruled that Green United’s mining devices, branded as “Green Boxes,” met the U.S. legal criteria for securities. She emphasized that the concept of securities extends beyond stocks or tokens, including contracts like those Green United offered, which align with an investment contract structure under U.S. law. How Did the SEC Present Its Case? The SEC alleged that Green United LLC tricked investors into funneling $18 million into Green Boxes, claiming these devices would mine a fictitious token, GREEN, on a non-existent blockchain. The court concluded that these sales and the associated hosting agreements were fraudulent investment contracts, akin to a Ponzi scheme promising a 10% monthly return. The case highlights how scammers exploit the allure of high returns in the crypto industry to deceive investors. Despite Green United’s defense that their products were not securities, the court dismissed this argument. The SEC’s comprehensive explanation of what constitutes a security underlined the ruling, reinforcing the SEC’s regulatory authority over cryptocurrency ventures and its consumer protection efforts. This ruling underscores significant points: The ruling sets a new precedent for how cryptocurrency-related products are viewed under security laws. The decision may lead to heightened scrutiny of companies selling similar crypto devices. Regulatory bodies might expand their oversight in the crypto industry, especially concerning investment contracts. The implications of the court’s decision could potentially alter the legal landscape for cryptocurrency mining hardware. Companies dealing in crypto devices…

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Filed under: News - @ September 26, 2024 2:26 am