May 18, 2022

Nvidia Fined $5.5m Over Impact of Cryptomining

Nvidia feeling the consequences of cryptomining

Nvidia has been charged by the US Securities and Exchange Commission [SEC] over the company’s failure to properly disclose the impact cryptomining had on Nvidia’s revenue.

During Nvidia’s 2018 fiscal year, a significant portion of its gaming-based revenue came off the back of sales of GPUs.

The SEC notes that Nvidia,

“…failed to disclose that cryptomining was a significant element of its material revenue growth from the sale of its [GPUs] designed and marketed for gaming”.

Furthermore, as Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit [no, I did not know that was a thing, either], added;

“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market. All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate”.

Nvidia, as the SEC notes, violated several Acts; specifically, the Securities Act of 1933 and the disclosure provisions of the Securities Exchange Act of 1934.

Additionally, the SEC also found that Nvidia “failed to maintain adequate disclosure controls and procedures”.

After neither admitting to nor denying the SEC’s findings, Nvidia agreed to a cease-and-desist order and the $5.5 million penalties.

Sadly, however, that $5.5 million is a mere drop in the ocean for Nvidia, who back in 2020, were accused of reporting $1 billion worth of those GPUs.

Which, were, again, reported in the company’s “gaming” sales.

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