Just a few days before Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC) and a prominent critic of cryptocurrency, was about to step down on January 20th, the SEC filed a lawsuit against Nova Labs, the company behind Helium Network. SEC Accusing the company of selling unregistered investment products, including devices used for mining cryptocurrencies and plans that allow users to exchange personal data for encrypted assets.

Nova Labs sued by SEC on the eve of Gensler's resignation

In a statement on January 17th, the SEC stated that Nova Labs mined its cryptocurrency Helium (HNT) by selling an electronic device called "Hotspots," as well as a program called "Discovery Mapping," which allows users to exchange private data for cryptocurrency, thus constituting the sale of unregistered securities.

The term 'unregistered securities' is widely known in the cryptocurrency industry, as there have been multiple similar lawsuits during Gensler's leadership of the SEC.

Although Ripple Labs achieved a major victory in July 2023 when the court ruled that the programmatic sale of XRP on digital asset exchanges does not constitute the sale of unregistered securities, the SEC quickly appealed the ruling in an attempt to overturn it.

meanwhile, SEC Nova Labs is also accused of making false statements to potential investors, claiming that well-known companies such as micro mobility company Lime, food and beverage giant Nestl é, and cloud computing software company Sale**orce are using or relying on their wireless networks, but these companies are not actually using the technology.

Helium hits back hard

In response to the SEC's allegations, Helium CEO Amir Haleem claimed on X that the lawsuit is "the last breath of America's failed crackdown on cryptocurrency companies". Haleem stated:

「SEC We wasted two years of our time and millions of dollars investigating any allegations they could think of... I am not often angry, but this series of events is infuriating... We will actively defend ourselves and continue Gensler's leadership of the SEC's record of disastrous defeat and blatant lies. Not only for us, but also for all DePIN projects. If Helium Hotspots were securities, then all DePINs would be at risk. We won't let this happen

SEC may withdraw some cryptocurrency cases by 2025

However, with the new SEC chairman taking office on January 20th, the agency may reassess its enforcement actions against cryptocurrency companies and even consider withdrawing certain litigation cases.

Reuters quoted "insiders" on January 15, pointing out that the SEC may review the existing litigation against cryptocurrency companies within the first few days after Trump takes office.

The report points out that, SEC Lawsuits may be suspended, especially those cases that do not involve fraud allegations, which means that cases purely accusing violations of securities laws may be put on hold.