The United States Securities and Exchange Commission (SEC) has dropped a lawsuit against Nova Labs, the creator of the decentralized wireless network Helium. The SEC had alleged the firm had issued unregistered securities.
The lawsuit against Nova Labs was the agency’s final act under former Chair Gary Gensler and aimed to penalize the crypto firm for a token launch.
SEC Dismisses Nova Labs Lawsuit
The lawsuit, filed in January 2025, was one of the SEC’s final enforcement actions against a crypto firm under former Chair Gary Gensler. Gensler stepped down from his post on January 20, the day President Donald Trump took office. The SEC dismissed the lawsuit with prejudice, meaning the firm cannot be charged with similar violations again for issuing its native HNT token in 2019. Helium Labs stated in a blog post that the dismissal establishes the fact that selling hardware and distributing tokens for network growth does not automatically make them securities in the eyes of the SEC.
“[W]e 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. [T]he outcome establishes that selling hardware and distributing tokens for network growth does not automatically make them securities in the eyes of the SEC [and] that the SEC cannot bring these charges against Helium again.”
The firm added,
“After the prior leadership at the SEC sued Nova Labs on the literal eve of the incoming administration, this landmark outcome is a pivotal turning point for the Helium community and the entire crypto industry, removing legal uncertainty for DePIN projects that use crypto incentives to build real-world infrastructure.”
The dismissal came on the same day Paul Atkins, Trump’s SEC Chair nominee took office after a lengthy confirmation process in the Senate.
SEC’s Changing Stance
The SEC under Gensler brought over 100 charges against crypto and Web3 developers for various reasons, including securities violations. However, the SEC has changed its stance towards crypto after Donald Trump took office. The market regulator has also dropped charges against other crypto firms, including Kraken, Coinbase, Ripple, and Uniswap. Donald Trump positioned himself as a pro-crypto President during campaigning and has stayed true to his word, appointing industry-friendly leaders to key positions and regulatory posts. He has promised to make the US the crypto capital of the world and ordered the federal government to create a national Bitcoin reserve and crypto stockpile.
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