Nova Labs, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26229 / January 18, 2025

Securities and Exchange Commission v. Nova Labs, Inc., No. 1:25-CV-00539 (S.D.N.Y. filed Jan. 17, 2025)

SEC Charges Nova Labs, Inc. with Fraud and Registration Violations

On January 17, 2025, the Securities and Exchange Commission charged Nova Labs, Inc. (“Nova Labs”) with allegedly conducting unregistered offerings of crypto assets as securities and defrauding investors.

According to the SEC’s complaint, from April 2019 to the present, Nova Labs made unregistered offers and sales of securities when it offered and sold electronic devices called “Hotspots” that mined Nova Labs’ crypto assets and “Discovery Mapping,” a program that allows users to exchange their private data for Nova Labs’ crypto assets.  Nova Labs also allegedly made materially false and misleading statements to prospective investors about prominent companies, such as Lime, Nestlé, and Salesforce, purportedly using, being current users of, or relying on the Nova Labs’ wireless network when those companies were not in fact using the network.

The SEC’s complaint charges Nova Labs with violating Sections 5(a), 5(c), and 17(a)(2) of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The SEC seeks permanent and conduct-based injunctions, disgorgement of ill-gotten gains, pre-judgment interest, and civil penalties.

The investigation was conducted by Emmy E. Rush, Christopher Colorado, Kim Han, and Douglas Smith in the SEC’s New York Regional Office. The investigation was supervised by Judith Weinstock and Sheldon L. Pollock of the New York Regional Office, as well as Chief Litigation Counsel Jorge Tenreiro. The litigation will be led by Ms. Rush, Mr. Colorado, and Peter Mancuso, and will be supervised by Jack Kaufman.