A fine of £4.4 million was imposed on Nvidia for concealing GPU sales to cryptocurrency miners

News Desk5
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Following an inquiry by the Securities and Exchange Commission (SEC), Nvidia was fined $5.5 million (£4.4 million) for failing to adequately disclose the impact of crypto mining on sales of its gaming GPUs.

Nvidia “failed to disclose that cryptomining represented a substantial aspect of their meaningful revenue increase from the sale of its graphics processing units (GPUs) developed and promoted for gaming,” according to a statement released by the SEC yesterday night (May 6).

While you may believe the probe is about the present chip scarcity, which has been worsened by crypto miners’ high demand for GPUs, the fine is about Nvidia’s 2018 fiscal year, when crypto mining was just getting started.

“As demand for and interest in crypto increased in 2017, NVIDIA customers increasingly exploited its gaming GPUs for cryptomining,” according to the SEC.

The issue is that Nvidia neglected to disclose to shareholders that the big increase in earnings was due to a “volatile business,” leaving investors without the information they needed to determine whether the previous performance was indicative of future performance.

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The SEC considered it particularly aggravating because Nvidia made comments about how other sections of the firm benefited from the demand for cryptocurrency, but left gaming out of those statements. This gave the appearance that cryptocurrency mining had no impact on Nvidia’s gaming business.

Nvidia, for its side, denies the SEC’s conclusions but has consented to a cease-and-desist order and a £4.4 million fine. To put it another way, Nvidia settled the matter without admitting any wrongdoing in order to avoid a harsher SEC judgement and a potentially larger punishment.

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