### SEC Sues Nova Labs for Alleged Fraud#

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Nova Labs, Inc. on January 17, 2025, alleging that it had been conducting unregistered offerings and sales of crypto asset securities since April 2019 through the sale of “Hotspots” devices and the “Discovery Mapping” program, and deceiving investors. The SEC believes that Nova Labs conducted unregistered offers and sales of securities when it offered and sold electronic devices called “Hotspots” (used to mine Nova Labs’ crypto assets) and “Discovery Mapping” (a program that allows users to trade their private data for Nova Labs’ crypto assets). The SEC’s lawsuit seeks to permanently enjoin Nova Labs and order disgorgement of ill-gotten gains, prejudgment interest, and civil penalties. This means that the SEC believes Nova Labs’ actions violated U.S. securities laws, that its issued crypto assets should be considered securities, and that Nova Labs’ unregistered issuance involved fraud against investors. This event has once again raised concerns about regulation in the crypto industry and serves as a reminder for investors to exercise caution when investing in crypto assets and to be aware of relevant laws and regulations.