Nova Labs Settles SEC Fraud Charges for $200K, Tokens Deemed Not Securities

Nova Labs, the company behind the Helium blockchain, has agreed to pay $200,000 to the U.S. Securities and Exchange Commission (SEC) to settle civil securities fraud charges. Without admitting or denying wrongdoing, the company resolved accusations of misleading institutional investors during a $200 million fundraising round between late 2021 and early 2022, which valued Helium at $1 billion.

The SEC alleged Nova Labs exaggerated relationships with major companies like Nestle, Salesforce, and Lime, claiming they were using Helium technology. However, the SEC clarified that the actual interactions were minimal and occurred prior to the Helium network’s launch in 2019. Nestle, for example, only conducted a small-scale hardware test in 2018, while Lime participated in two brief demonstrations in early 2019. Both companies later issued cease-and-desist letters to Nova Labs for misusing their names and trademarks.

In a significant development, the SEC dropped two other claims that HNT, MOBILE, and IOT tokens are securities, dismissing them with prejudice. This prevents the SEC from refiling those claims in the future. Nova Labs celebrated the ruling, stating in a blog post that the decision is a “major win” and confirms that distributing tokens and selling hardware for network growth does not make them securities.

Nova Labs’ Chief Legal Officer Sarah Aberg emphasized that Helium network data has always been publicly accessible. The settlement now awaits approval by a federal judge in the Southern District of New York.

This resolution marks a pivotal moment for the Helium ecosystem and sets an important precedent for crypto projects distributing utility tokens tied to decentralized infrastructure.