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In its latest action against the digital asset industry, the US Securities and Exchange Commission (SEC) has said that crypto mining devices are securities. Moreover, a federal court ruled that crypto mining ‘boxes’ were securities, according to a Bloomberg report.
The ruling came amid the SEC’s lawsuit against Green United. Indeed, the agency sued the company in March of last year, alleging an $18 million fraud scheme through the sale of Bitcoin mining rigs. In response, Green United disputed the security designation but failed in its attempt to skew the position of US District Court Judge Ann Marie McLff Allen.
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Federal Court Rules Crypto Mining Boxes Are Securities in SEC Lawsuit
Amid an ever-changing regulatory landscape, the SEC has consistently embraced enforcement in the US. The agency has continued to opt for litigation as companies look to navigate the continually shifting standards in the country. Now, they have gone after Bitcoin mining in its latest action.
The SEC has said that crypto mining devices are securities in its recent lawsuit against Geren United. Moreover, a federal court ruling has agreed with the stance. Indeed, the court ruled not to throw out the civil fraud suit. They claim the agency had adequately proven its stance on the investment contract status of crypto mining boxes.
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According to the court, the SEC “has sufficiently alleged a security in the form of Green Boxes (computer hardware), coupled with a hosting agreement to operate the Green Boxes.” The original lawsuit claims that Green United sold unregistered ‘Green Boxes’ that made fraudulent promises.
Specifically, the agency said the firm led “investors to believe that those products had a digital token they called GREEN on a purported ‘Green Blockchain.’” Additionally, they say the company led investors to believe GREEN could increase in value. Instead, the boxes minded Bitcoin, which was not transferred to investors of the nodes.