#SEC Sues Nova Labs for Fraud#

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Nova Labs, Inc. on January 17, 2025, alleging that the company has been engaged in unregistered offerings and sales of crypto asset securities and defrauding investors since April 2019 through its sale of “Hotspots” devices and “Discovery Mapping” program. The SEC alleges that Nova Labs made unregistered offers and sales of securities in connection with its offering and sale of electronic devices known as “Hotspots” (which are used to mine Nova Labs’ crypto assets) and “Discovery Mapping” (a program that allows users to exchange their private data for Nova Labs’ crypto assets). The SEC’s lawsuit seeks to permanently enjoin Nova Labs, order disgorgement of ill-gotten gains, prejudgment interest and civil penalties. The SEC’s allegations focus on Nova Labs’ unregistered offerings of crypto asset securities and its defrauding of investors through the “Hotspots” devices and “Discovery Mapping” program. The lawsuit will have significant implications for Nova Labs and the broader cryptocurrency industry, and could lead to increased regulatory scrutiny of cryptocurrency projects.