Helium founder says company will defend itself 'vigorously' against SEC lawsuit

The Securities and Exchange Commission has sued Nova Labs, the creator of the Helium network, accusing the firm of selling unregistered securities and misleading investors in the latest, and likely final, enforcement action under outgoing Chair Gary Gensler. 

The lawsuit, filed Friday, takes issue with three Helium-related tokens: the Helium Network Token (HNT), Helium Mobile Token (MOBILE), and the Helium IoT Network Token (IoT), which the agency alleges were sold as unregistered securities. 

The lawsuit also accuses Nova Labs of misleading investors about several high-profile partnerships. Though the company told investors that companies such as Nestlé, Lime, and Salesforce were using the network, the companies were neither customers nor "users" of the network, the lawsuit claims.

"Indeed, when Nestlé and Lime learned that Nova Labs was publicly touting their purported relationships, each issued Nova Labs a cease-and-desist letter," the lawsuit states. 

Helium's founder Amir Haleem previously downplayed criticism around the company's use of the Lime and Salesforce logos on its website following news reports that neither company was using the Helium network. 

"In the case of the brands mentioned in recent articles, we had approvals to talk about the use cases but we’re going to be much more rigorous now about the logo approval process going forward to avoid any confusion," a Nova Labs spokesperson told The Block at the time.

The lawsuit claims Nova Labs executives knew that the partnership claims were exaggerated. "In response to Nestlé’s cease and desist letter, Nova Labs’ Business Development VP wrote to others within Nova Labs that he, '[c]an’t believe we made it this long without them calling us out'," the lawsuit states. With respect to Lime, Nova Labs' COO reportedly told its CEO, "they also fired all their PR people so no one will challenge us," since the Lime employees who originally engaged with Nova Labs were no longer at the company. 

The lawsuit seeks to impose monetary penalties on the company and prohibit it from purchasing, offering, or selling any crypto assets offered as securities. The enforcement action is among the final actions the SEC has taken under Chair Gary Gensler, who is set to resign on Monday in advance of Donald Trump's inauguration to a second presidential term. 

Helium's founder responds

Haleem posted a defiant message on X Sunday, calling the lawsuit "the last gasp of a failed crusade against crypto companies in the US." 

"The SEC has wasted two years of our time and millions of our dollars pursuing any claim they could think of...I don't get angry very often, but this is a blood boiling sequence of events," Haleem said. With regards to the allegations that Helium misled its investors, Haleem said, "We've addressed this in the past, and have worked with every company on Helium mentioned in the complaint." 

"We'll defend ourselves vigorously and continue the Gensler SEC's track record of miserable losses and outright lies, Haleem concluded. "Not just for us, but for all DePIN projects. If Helium hotspots are securities, it puts all DePINs in danger. We won't allow that to happen."