The U.S. Securities and Exchange Commission has dismissed its lawsuit against Nova Labs, the creator of the decentralized wireless network Helium, abandoning allegations that the firm issued unregistered securities through its native HNT token launch in 2019. The case was filed in January 2025 as one of the SEC's final enforcement actions under former Chair Gary Gensler, who stepped down when President Donald Trump took office on January 20.
What to Know:
- The lawsuit was dismissed with prejudice, preventing similar future charges against Nova Labs
- This was the SEC's final crypto enforcement action under former Chair Gary Gensler
- The dismissal coincided with Trump nominee Paul Atkins taking office as SEC Chair
Regulatory Reversal Signals New Approach
The SEC dismissed the lawsuit with prejudice, a significant legal victory ensuring Nova Labs cannot face similar charges again for issuing its HNT token. This dismissal occurred on the same day that Paul Atkins, President Trump's SEC Chair nominee, took office following a contentious Senate confirmation process.
The timing marks a clear break from the previous administration's aggressive stance toward cryptocurrency companies.
Helium Labs celebrated the dismissal in a blog post, highlighting the broader implications for the cryptocurrency industry. "We can now definitively say that all compatible Helium Hotspots and the distribution of HNT, IOT, and MOBILE tokens through the Helium Network are not securities," the company stated. This outcome establishes that "selling hardware and distributing tokens for network growth does not automatically make them securities in the eyes of the SEC," a precedent that could benefit similar projects.
The company further described the dismissal as "a landmark outcome" and "a pivotal turning point" not only for the Helium community but for "the entire crypto industry, removing legal uncertainty for DePIN projects that use crypto incentives to build real-world infrastructure."
Broader Pattern of Regulatory Shift
The Nova Labs case represents just one example of a broader pattern of regulatory reversals following the presidential transition. Under Gensler's leadership, the SEC brought more than 100 charges against crypto and Web3 developers for various reasons, including alleged securities violations.
The aggressive enforcement approach created significant uncertainty within the cryptocurrency sector.
However, the SEC has dramatically changed its stance toward crypto companies since President Trump took office in January. The market regulator has dropped charges against several other prominent firms in the industry, including Kraken, Coinbase, Ripple, and Uniswap. Each dismissal has reinforced the perception of a major regulatory shift.
During his campaign, Trump positioned himself as a pro-cryptocurrency candidate, promising to make the United States "the crypto capital of the world." Since taking office, he appears to be following through on these commitments.
His administration has appointed industry-friendly leaders to key regulatory positions, including the SEC.
Beyond regulatory appointments, Trump has taken concrete steps to embrace cryptocurrency at the federal level. He has ordered the federal government to create a national Bitcoin reserve and establish a cryptocurrency stockpile, signaling a fundamental shift in the government's approach to digital assets.
The Nova Labs case dismissal, coming on Atkins' first day as SEC Chair, suggests this pattern of regulatory relief for cryptocurrency companies may continue throughout the Trump administration. Industry observers are closely watching for additional policy changes that could further reshape the regulatory landscape for digital assets.
Closing Thoughts
The SEC's dismissal of its case against Nova Labs represents a significant victory for the cryptocurrency industry and signals a fundamental shift in regulatory approach under the Trump administration. As more cases from the Gensler era are abandoned, cryptocurrency companies face an increasingly favorable regulatory environment that contrasts sharply with the previous administration's enforcement-heavy approach.