SEC files lawsuit against Nova Labs over unregistered securities

The U.S. Securities and Exchange Commission (SEC) has initiated legal action against Nova Labs, the company behind the Helium Network, alleging the sale of unregistered investment products.

This lawsuit comes just days before SEC Chair Gary Gensler, known for his critical stance on cryptocurrencies, is set to step down on January 20.

In a statement released on January 17, the SEC accused Nova Labs of offering electronic devices known as “Hotspots,” which mine the Helium (CRYPTO:HNT) cryptocurrency.

Additionally, the SEC highlighted a program called “Discovery Mapping,” which allowed users to trade their personal data for crypto assets.

The SEC's allegations emphasise that these offerings constituted unregistered securities, a term that has become increasingly familiar within the cryptocurrency industry amid numerous similar lawsuits under Gensler's leadership.

Despite a notable victory for Ripple Labs in July 2023, where a court ruled that XRP (CRYPTO:XRP) did not qualify as an unregistered security in certain contexts, the SEC has continued to pursue enforcement actions against other firms.

The commission also accused Nova Labs of misleading potential investors by falsely claiming partnerships with major companies such as Lime, Nestlé, and Salesforce.

These assertions were made while those companies were reportedly not utilising Nova Labs' wireless network.

As the SEC transitions to new leadership after Gensler's departure, there are indications that the agency may reconsider its approach to certain crypto enforcement cases.

Reports suggest that the SEC could freeze litigation related to securities law violations that do not involve fraud allegations shortly after Trump's inauguration.