SEC Files Lawsuit Against Nova Labs Over Misleading Claims

According to ShibDaily, the U.S. Securities and Exchange Commission (SEC) has initiated legal proceedings against Nova Labs, Inc., accusing the company of making deceptive statements about its partnerships with major corporations. This action comes just days before SEC Chair Gary Gensler's departure. In a filing dated January 17, the SEC alleged that Nova Labs, the developers behind the Helium Network, breached federal securities laws by selling unregistered investment products. These products included "Hotspots," devices intended to mine Helium's native cryptocurrency (HNT), and a program called "Discovery Mapping," which purportedly allowed users to exchange personal data for cryptocurrency rewards. The SEC further accused Nova Labs of misleading customers and engaging in deceptive practices in the operation of its programs. The regulatory filing claims that the company falsely represented its business partnerships by asserting that major corporations such as Salesforce, Nestlé, and Lime were actively using its wireless network. These assertions were reportedly made to attract potential investors and promote the Helium Network. The SEC is seeking a court order to impose permanent restrictions on Nova Labs in response to the alleged violations. The filing also demands the return of any unlawfully obtained gains, pre-judgment interest, and financial penalties. However, the SEC did not specify the financial losses or potential fines involved. Despite the SEC's filing last Friday, HNT initially showed resilience. According to CoinGecko data, 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 represent one of the final enforcement actions under the leadership of SEC Chair Gary Gensler. Known for his critical stance on cryptocurrencies, Gensler has played a significant role in enhancing regulatory oversight of the crypto industry during his tenure. This action underscores the ongoing tensions between the cryptocurrency sector and the SEC, as the classification of digital assets as "unregistered securities" has been a frequent point of contention during Gensler's leadership. The lawsuit highlights the commission's continued focus on the crypto industry amid growing speculation about potential changes in regulatory priorities as new leadership, under Paul Atkins, prepares to assume control.