The U.S. Securities and Exchange Commission (SEC) has taken legal action against Nova Labs, Inc., accusing the tech company of making misleading statements
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Nova Labs, Inc., alleging that the tech company made misleading statements regarding its partnerships with prominent corporations, just days before SEC Chair Gary Gensler's planned departure.
In a filing dated January 17, the SEC alleges that Nova Labs, the developers of the Helium Network, violated federal securities laws by selling unregistered investment products. These products include “Hotspots,” devices designed to mine Helium's native cryptocurrency (HNT), and a program called “Discovery Mapping,” which reportedly allowed users to trade personal data for cryptocurrency rewards.
The SEC further alleges that Nova Labs misled customers and engaged in deceptive practices while operating its programs. According to the regulatory filing, the company allegedly misrepresented its business partnerships by falsely claiming that major corporations, including Salesforce, Nestlé, and Lime, were actively utilizing its wireless network. These claims were reportedly used to attract potential investors and promote the Helium Network.
The regulator is seeking a court order to impose permanent restrictions on Nova Labs in response to the alleged violations. The filing also calls for the return of any unlawfully obtained gains, pre-judgment interest, and financial penalties. However, the SEC did not provide specifics regarding financial losses or the potential fines involved.
Despite the SEC's filing last Friday, HNT appeared resilient initially. According to data from CoinGecko, on January 19, the digital asset surged by approximately 10% over the previous 24 hours, reaching $5.39. However, the token has since retraced and is now trading at $4.64 at the time of writing.
This lawsuit could mark one of the final enforcement actions under the leadership of SEC Chair Gary Gensler, who is set to step down from his role on January 20. Known for his critical stance on cryptocurrencies, Gensler has played a key role in strengthening regulatory oversight of the crypto industry throughout his tenure.
This action emphasizes the ongoing tensions between the cryptocurrency sector and the SEC, as the classification of digital assets as “unregistered securities” has become a frequent point of contention during Gensler's tenure. The lawsuit also highlights the commission's continuing focus on the crypto industry amid growing speculation about potential shifts in regulatory priorities as new leadership, under Paul Atkins, prepares to take the helm.
