Nvidia Fined $5.5M for Hiding Crypto Mining Sales

Nvidia Fined $5.5M for Hiding Crypto Mining Sales
  • The SEC has charged Nvidia Corp. for being unable to disclose that crypto mining increased its revenue.
  • All issuers “must ensure that their disclosures are timely, complete, and accurate,” SEC warned.
  • Nvidia agreed to a cease-and-desist order and to pay a $5.5 million penalty.

The US Securities and Exchange Commission (SEC) has penalized global technology company Nvidia Corporation for “inadequate disclosures concerning the impact of crypto mining on the company’s gaming business.”

“The company failed to disclose that crypto mining was a significant element of its material revenue growth from the sale of its graphics processing units (GPUs) designed and marketed for gaming,” the SEC order found during consecutive quarters in NVIDIA’s fiscal year 2018.

According to the press release, the securities regulator pointed out that Nvidia customers used gaming GPUs more and more for mining cryptocurrencies as the demand and popularity of cryptocurrency emerged since 2017.

The SEC detailed that Nvidia was aware that this increase in gaming sales was due to crypto mining. However, the company failed to disclose in its Forms 10-Q as required.

Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit Kristina Littman said:

“Nvidia’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market.”

In addition, Littman warned all issuers, including those that pursue opportunities involving emerging technology, must ensure that timely, complete, and accurate disclosures.

Nvidia settled to pay a $5.5 million penalty and a cease-and-desist order without admitting or denying the SEC’s findings.

This investigation was led by the Crypto Assets and Cyber Unit staff Brent Wilner. Moreover, Diana Tani and Ms. Littman of the Crypto Assets and Cyber Unit supervised the case.

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Bryan is a gamer who became genuinely interested in crypto after his initial exposure to Play-to-Earn games like Axie Infinity and Pegaxy. He has basic knowledge of technical analysis and is keeping an eye out for interesting developments in the metaverse and GameFi space.