#SEC Sues Nova Labs for Fraud#

The U.S. Securities and Exchange Commission (SEC) recently filed a lawsuit against Nova Labs, Inc., alleging that it has been conducting unregistered offerings and sales of crypto asset securities and defrauding investors since April 2019 through the sale of “Hotspots” devices and the “Discovery Mapping” program. The SEC alleges that Nova Labs made unregistered offers and sales of securities in offering and selling electronic devices called “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 is seeking a permanent injunction against Nova Labs, as well as disgorgement of ill-gotten gains, prejudgment interest, and civil penalties. This lawsuit indicates that the SEC is stepping up its scrutiny of the cryptocurrency industry, with a focus on unregistered securities offerings and fraudulent conduct.