The U.S. Securities and Exchange Commission (SEC) has initiated legal proceedings against Nova Labs, the developer behind the Helium network, accusing the company of selling unregistered securities and deceiving investors. This lawsuit is among the final actions led by outgoing SEC Chair Gary Gensler before stepping down prior to Donald Trump's forthcoming presidency.
Filed on Friday, January 17, 2025, the lawsuit addresses three tokens associated with Helium: the Helium Network Token (HNT), Helium Mobile Token (MOBILE), and the Helium IoT Network Token (IoT). The SEC contends that these tokens were sold as unregistered securities, breaching federal securities laws.
Investigations further reveal that Nova Labs allegedly misrepresented business ties. The SEC claims Nova Labs falsely advertised affiliations with prominent companies such as Nestlé, Lime, and Salesforce as network users, though no such associations existed. Both Nestlé and Lime reportedly issued cease-and-desist notices following these misleading promotions.
Cited internal communications indicate that Nova Labs' executives were aware of these exaggerated claims. One executive expressed disbelief at the lack of earlier challenges, while another noted that Lime’s absence of a public relations team might shield the firm from scrutiny.
The SEC seeks financial penalties against Nova Labs and aims to prohibit the company from offering or selling crypto assets classified as securities. This action adds to Gensler's contentious tenure characterized by rigorous examination of crypto firms.
In retaliation, Helium founder Amir Haleem publicly criticized the lawsuit, describing it as "the last gasp of a failed crusade against crypto companies in the U.S." Haleem expressed frustration over the allocation of time and resources, asserting, "I don’t get angry very often, but this is a blood-boiling sequence of events."
Haleem emphasized that Nova Labs had previously addressed concerns related to misleading investors and maintained communication with the companies named in the complaint. He further defended Helium’s contributions to decentralized physical infrastructure networks (DePIN), cautioning regulators that labeling Helium’s hotspots as securities could jeopardize the entire DePIN ecosystem.
"We’ll defend ourselves vigorously," Haleem declared, pledging to protect Helium and other DePIN initiatives. "We won’t allow that to happen." This lawsuit highlights the SEC’s persistent focus on cryptocurrency enforcement even amid leadership changes.