The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Nova Labs, the company behind the open-source Helium Network, just days before Chairman Gary Gensler's departure.
According to the January 17 announcement from the SEC, Nova Labs is accused of selling unregistered securities through the following products:
- Electronic devices called "Hotspots" used to mine the Helium (HNT) cryptocurrency.
- The "Discovery Mapping" program that allows users to exchange personal data to receive crypto assets.
The lawsuit specifically names three tokens as securities: Helium Network Token (HNT), Helium Mobile Token (MOBILE), and Helium IoT Network Token (IoT).
The SEC also alleges that Nova Labs made misrepresentations to potential investors, claiming that large companies like Lime, Nestlé, and Salesforce were using or relying on their wireless network, which was not the case.
In response, founder Haleem posted a defiant message on X yesterday, calling the lawsuit a "last-ditch effort" of a failed campaign against crypto companies in the U.S.
He criticized: "The SEC has wasted 2 years of our time and millions of dollars pursuing any charges they can dream up... I'm rarely angry, but this is a string of events that has me boiling."
Regarding the allegations of investor deception, Haleem claimed they had previously addressed this issue and had worked with all the companies mentioned in the lawsuit on the Helium network.
"We will defend ourselves vigorously and continue to expose the SEC's string of failures and lies under Gensler. Not just for us, but for all DePIN projects. If Helium Hotspots are considered securities, the entire DePIN space will be in jeopardy. We won't let that happen."
The concept of "unregistered securities" has become a familiar topic in the cryptocurrency industry, with a series of high-profile lawsuits occurring under Gensler's tenure. A notable example is the case against Ripple Labs. Although Ripple scored a major victory in July 2023 when a court ruled that XRP is not an investment contract in crypto exchange transactions, the SEC has filed an appeal against this decision.
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