Nova Labs, the company that manages the Helium blockchain, has entered into a $200,000 settlement with the U.S. Securities and Exchange Commission (SEC) to resolve civil securities fraud charges filed against them earlier this year.
Key Details:
- Settlement Amount: Nova Labs will pay $200,000 without admitting or denying any wrongdoing.
- Allegations: The SEC accused Nova Labs of misleading institutional investors by overstating partnerships with big companies like Nestle, Salesforce, and Lime.
- Outcome of Settlement: As a result of the settlement, the SEC has withdrawn its claims that Nova Labs’ tokens constituted securities.
In a court filing, Nova Labs was cited for misleading investors while raising $200 million at a valuation of $1 billion. The SEC’s complaint noted Nova Labs’ false claims about relationships with these corporations, which in reality were minimal and predated the Helium network’s launch in mid-2019.
For instance, the SEC cited that Nestle’s involvement was simply a small hardware test back in 2018, and its connection with Lime involved brief demonstrations to just two employees, one of whom soon left the company.
Both companies issued cease-and-desist orders against Nova Labs, demanding that they stop claiming ongoing partnerships.
As part of the settlement, the SEC dropped two claims alleging that three of Nova Labs’ tokens (HNT, MOBILE, and IOT) were securities, barring the SEC from future claims on these grounds.
Nova Labs hailed the settlement as a significant victory for Helium and the People’s Network, asserting that the agreement affirms all Helium Hotspot sales and token distribution do not classify as securities according to the SEC.
“Now we can definitively say that distributing tokens for network growth does not automatically classify them as securities,” noted the firm in a blog post, which oddly omitted mention of the settlement or the investor misleading claims.
When reached for further details on the matter, Chief Legal Officer Sarah Aberg remarked that while they cannot admit to wrongdoing, they maintain that data usage on the Helium Network has always been publicly accessible.
This settlement has been filed with the Southern District of New York for judicial approval.
