SEC, led by Gensler, files a lawsuit against network developer Helium

What’s new? The US Securities and Exchange Commission (SEC) has accused Nova Labs, the company behind the development of the Helium network, of making an unregistered offering of crypto asset securities and defrauding investors. According to the January 17 lawsuit, from April 2019 to the present, Nova Labs sold electronic Hotspots devices for cryptocurrency mining and offered a Discovery Mapping program where users can sell their personal data for cryptocurrency.

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What else is known? To attract new investors, Nova Labs also made knowingly false claims that large companies such as Lime, Nestle, and Salesforce were using its open-source Helium network, officials said.

The regulator in the lawsuit categorized three assets issued by the company as securities: the Helium Network Token (HNT), Helium Mobile Token (MOBILE), and Helium IoT Network Token (IoT).

Helium founder Amir Haleem, in his X-account, called the lawsuit “the last gasp of a failed crusade against crypto companies in the US.” He emphasized that Nova Labs has cooperated with every company mentioned on the website, and now it intends to defend itself in court.

Source: X.com

Halim noted that this process has implications for all decentralized physical infrastructure (DePIN) projects. So, if Hotspots are recognized as securities, it exposes all other DePIN projects to regulatory risk.

“We'll defend ourselves vigorously and continue the Gensler SEC's track record of miserable losses and outright lies,” the entrepreneur concluded.

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The lawsuit seeks monetary penalties and an injunction prohibiting Nova Labs from buying, offering, or selling any crypto asset securities. It is one of the latest actions taken by the SEC under Chairman Gary Gensler, who is stepping down on January 20 due to Donald Trump’s inauguration for a second term as president.

Earlier, it became known that Trump intends to issue an executive order recognizing cryptocurrency as a national priority. He may also oblige regulators to stop lawsuits against crypto firms not related to allegations of fraud.