The founders of Green United LLC filed a motion to dismiss the SEC lawsuit accusing them of fraudulent activity.
The regulator sued Green United, a green mining company, in March, alleging that its founders, Wright Thurston and Kristoffer Krohn, were promising investors too much profit and misleading them.
Thurston and Krohn deny creating $18 million fraud scheme and seek dismissal of SEC lawsuit. Green United executives argue that the agency has no authority over cryptocurrencies.
Green United noted that the SEC’s position on digital assets is unclear and inconsistent, the regulator fails to provide a clear definition of cryptocurrencies and prefers to oversee the industry through enforcement rather than negotiation.
The SEC has stubbornly refused to make an effort to create regulatory rules for crypto-assets and insists on applying established rules that are only appropriate for traditional finance, Green United noted.
The executives cited another argument in their favor-the SEC was never able to clarify what criteria it used to classify green-mining equipment as securities or investment contracts.
Gary Gensler, chairman of the SEC, had previously stated that all crypto-assets, with the exception of bitcoin, should be considered securities under the Howey test.
Recently Gensler once again stressed that the rules for exchanges and brokers have long existed, but the cryptocurrency companies themselves refuse to comply with them.