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 misleading potential investors.

This lawsuit marks a notable action taken as outgoing SEC Chair Gary Gensler prepares to depart prior to Donald Trump’s anticipated second presidential term.

Filed on January 17, 2025, the SEC targets three tokens associated with Helium: the Helium Network Token (HNT), Helium Mobile Token (MOBILE), and Helium IoT Network Token (IoT). The SEC claims these tokens were issued as unregistered securities, thus contravening federal securities laws.

SEC Allegations Against Nova Labs

Furthermore, the SEC purports that Nova Labs misrepresented its relationships with various corporate partners. The allegations suggest that Nova Labs erroneously publicized associations with well-known businesses such as Nestlé, Lime, and Salesforce, despite these companies having no connection.

The SEC states that Nestlé and Lime have since issued cease-and-desist letters upon becoming aware of Nova Labs’ misleading statements.

“Indeed, when Nestlé and Lime learned that Nova Labs was publicly touting their purported relationships, each issued Nova Labs a cease-and-desist letter,” the lawsuit declares.

Internal correspondence referenced in the charges implies that Nova Labs executives were conscious of the exaggerated claims. One executive reportedly noted their disbelief of the lack of earlier challenges to these claims, while another suggested that Lime’s absence of a public relations team might afford the company some protection from scrutiny.

The SEC aims to impose financial penalties on Nova Labs while seeking to prevent the company from offering or selling crypto assets classified as securities. This legal move adds to the controversies that marked Gensler’s term, characterized by heightened scrutiny of cryptocurrency firms.

Helium Founder Responds

In reaction, Amir Haleem, the founder of Helium, expressed strong opposition to the lawsuit via social media, calling it “the last gasp of a failed crusade against crypto companies in the U.S.”

Haleem accused the SEC of misusing time and resources, commenting, “I don’t get angry very often, but this is a blood-boiling sequence of events.”

Regarding the accusations of deception towards investors, Haleem maintained that Nova Labs had previously addressed these issues and communicated with the companies mentioned in the allegations.

as some of you have seen, the SEC has decided to sue us and @helium literally as they are walking out of the door. the last gasp of a failed crusade against crypto companies in the US naturally, none of the claims hold any water at all. the SEC has wasted two years of our time…
— amir 🎈✊🛡️ (@amirhaleem) January 19, 2025

Haleem also defended Helium’s involvement in decentralized infrastructure networks, warning that if Helium’s hotspots were classified as securities, it could impose regulatory hurdles across the entire ecosystem.

“We’ll defend ourselves vigorously,” Haleem vowed, emphasizing their commitment to protect Helium and other projects.

This lawsuit underscores the SEC’s persistent focus on crypto enforcement, even as significant leadership transitions are anticipated.