Key Takeaways:
- SEC dismissed the case against Nova Labs’ Helium, bringing clarity to DePIN-based regulations.
- The move implies that selling hardware and distributing tokens for a community’s growth does not automatically make them securities.
- The case was filed as one of the last acts of then-chairman Gary Gensler, and the dismissal is a victory against his aggressive anti-crypto stands.
The U.S. Securities and Exchange Commission has agreed to dismiss the case against blockchain-based wireless infrastructure project Helium, withdrawing the allegations that the firm sold unregistered securities. In its blog post, Helium responded that the dismissal confirms that selling hardware and distributing tokens for network growth does not automatically make them securities.
The lawsuit was filed on January 17th, 2025, a few days before Trump’s inauguration ceremony. It is also considered one of the final acts of Gary Gensler before stepping down from the role of SEC chairman on January 20th. The end of Gensler’s tenure and the arrival of Trump’s pro-crypto regulatory body helped Helium survive the lawsuit.
The verdict has given some hope regarding the emerging DePIN projects, where the web3 users can witness supportive regulations soon. The crypto-friendly SEC’s reversal of the previous regulatory approach and the implementation of the nuanced and complex framework are expected to create new waves in the U.S. economy, aligning with Trump’s vision to make America the crypto capital of the world.
SEC’s Decision Removes Legal Uncertainty of DePIN Projects
From the foundational days itself, decentralized physical infrastructure networks (DePIN) have been getting mixed responses from the authorities, mainly due to the lack of an advanced regulatory framework to understand them. This gap often leads to legal disputes, as witnessed in Helium’s case. However, the final verdict of the case ensures that DePIN projects can move forward with full confidence, helping the world adopt the latest innovations.
SEC vs Helium Case Details
The lawsuit was filed against Nova Labs, which runs Helium Network, with allegations such as falsely claiming partnerships with Nestle, Salesforce, and Lime, as well as the unlawful selling of investment contracts without gaining approval from the SEC. The Commission alleged that Nova sold millions of dollars worth of securities since April 2019 and asked for civil penalties, return of the gains, and a permanent injunction.
SEC pointed out serious misconduct, including false impressions of commercial success and the conscious bypassing of the registration requirements. Helium co-founder and Nova Labs CEO Amir Haleem commented on the act, saying that it was the last gasp of a failed crusade against the pro-crypto future of the U.S. “The SEC has wasted two years of our time and millions of our dollars pursuing any claim they could think of”, he added.
Although Amir Haleem defended Helium’s stands and decided to fight for DePIN projects, everybody was optimistic that the administration that replaced Gary Gensler would dismiss the case sooner or later. The new administration, led by Paul Atkins, dismissed the case as expected, however, it cost Helium $200,000 as a civil penalty.
About Helium Network
Helium is a blockchain-based wireless infrastructure network that facilitates the deployment and management of wireless networks through token incentivization. It leverages Solana Blockchain as the foundation and uses the unique Proof-of-Coverage (PoC) as the consensus algorithm. The native token is HNT, mainly used as an incentive mechanism and governance tool.