SEC officially discontinues its lawsuit against Nova Labs, marking an end to months of legal limbo

The suit centered on allegations that Helium's HNT, MOBILE, and IoT tokens were unregistered securities.

The U.S. Securities and Exchange Commission (SEC) has officially discontinued its lawsuit against Nova Labs, the primary developer of the Helium Network, marking an end to months of legal limbo regarding the characterization of its native tokens.

The suit, which accused Helium’s HNT, MOBILE, and IoT tokens of being unregistered securities, was withdrawn on April 10 following a partial settlement. This dismissal is an important milestone for utility-oriented crypto projects operating in the current regulatory environment.

Allegations and Settlement Terms

According to a blog post on Medium published by Helium on April 10, the United States Securities and Exchange Commission (SEC) has dismissed its lawsuit against Nova Labs, the company behind the decentralized wireless network Helium.

Nova Labs agreed to pay a $200,000 civil fine to the SEC to settle fraud charges involving its 2021-2022 funding round. The company was charged by the SEC with exaggerating its connections with Nestlé, Lime, and Salesforce in an attempt to raise capital at a valuation of $1 billion. The settlement involved no admissions or denials of misconduct by Nova Labs.

The SEC’s lawsuit, which was filed in January, accused Nova Labs of violating federal securities laws in the 2019 sale of its native token, Helium (HNT). The case was among the last major enforcement actions by former Chair Gary Gensler, who stepped down on January 20 following President Donald Trump’s inauguration.

The complaint has now been dismissed with prejudice, which will bar the SEC from bringing similar charges against Nova Labs based on the same actions.

In their blog post, Helium has termed this “a major win for Helium and The People’s Network”. They further said that “With this dismissal, we can now definitively say that all compatible Helium Hotspots and the distribution of HNT, IOT, and MOBILE tokens through the Helium Network are not securities.”

Industry Applauds The Move

The SEC ruling comes amid ongoing development in U.S. crypto policy, in part due to a more liberal approach to utility tokens within new frameworks unveiled during the Trump era. The action could herald a change in the way the SEC differentiates between tokens sold as investments and those with practical uses.

The SEC withdrawal of complaint marks the end of a period of uncertainty for the Decentralized Physical Infrastructure Network (DePIN) sector, which has often been met with vague regulations. Helium wrote in a blog that the ruling reflects the current position of the SEC with respect to Web3 projects, especially hardware-based and community-oriented benefits. Although this might be a positive signal for similar businesses, it does not release them from other aspects of the law.

Even though Nova Labs had a positive result, legal analysts caution that uncertainty remains. Every cryptocurrency case is decided on its own merits, and the lack of a clear government framework still poses challenges for blockchain businesses in the United States. However, the dismissal is a huge relief for Helium and its supporters—and could signal a slow move toward more transparent standards for the crypto industry.