SEC charges Nova Labs over false claims and unregistered securities
The case is part of the SEC’s wider effort to regulate the cryptocurrency industry and address deceptive practices.
The Securities and Exchange Commission (SEC) has charged Nova Labs with conducting unregistered securities offerings and making false claims about its business partnerships to mislead investors. According to the SEC’s complaint, Nova Labs sold unregistered investment contracts since April 2019, primarily through its Hotspots and Discovery Mapping Program, which promised returns through network expansion and increased demand for its crypto tokens.
The company allegedly misled investors by claiming that large companies like Nestlé, Salesforce, and Lime were using its wireless network, despite no such partnerships existing. When these companies discovered the false claims, they issued cease-and-desist letters to Nova Labs. The SEC argues that these fraudulent statements were material to investor decisions and violated federal securities laws.
As a result, the SEC is seeking multiple remedies, including permanent injunctions, disgorgement of ill-gotten profits, and civil penalties. This case is part of the SEC’s ongoing efforts to regulate cryptocurrency companies operating without proper securities registration and making misleading claims to attract investors.
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