The SEC has charged Nova Labs with fraud and unregistered crypto offerings, alleging it misled investors about corporate partnerships. Learn more about the high-profile case marking Gary Gensler’s final days as SEC Chair.
SEC Files Fraud Charges Against Nova Labs
The U.S. Securities and Exchange Commission (SEC) has charged Nova Labs Inc. with fraud and securities law violations tied to its crypto-related activities. The lawsuit, filed on Jan. 17 in the U.S. District Court for the Southern District of New York, accuses the company of unregistered crypto asset offerings and misleading investors regarding corporate partnerships.
Key Allegations Against Nova Labs
The SEC claims Nova Labs has conducted unregistered offerings of securities since April 2019, violating Sections 5(a) and 5(c) of the Securities Act. The company allegedly sold “Hotspots” that mined crypto assets and promoted “Discovery Mapping,” enabling users to trade private data for digital tokens.
The complaint also highlights false claims about partnerships with companies such as Lime, Nestlé, and Salesforce. According to the SEC, these companies did not use Nova Labs’ wireless network as advertised, misleading investors and violating Sections 17(a)(2) of the Securities Act and Rule 10b-5 of the Securities Exchange Act.
Gensler’s Final Push for Accountability
This lawsuit comes days before SEC Chair Gary Gensler’s departure, reflecting his aggressive stance on regulating the crypto industry. Under Gensler’s leadership, the SEC has pursued numerous enforcement actions, aiming to bring transparency and accountability to the crypto market.
Remedies and Penalties Sought by the SEC
The SEC seeks permanent injunctions, disgorgement of profits, pre-judgment interest, and civil penalties against Nova Labs. These measures aim to address the alleged harm caused to investors and deter future violations.
Stay informed on the latest updates in crypto regulation and enforcement actions by following this ongoing case.
