Nvidia fined $5.5 million for hiding the amount of gaming GPUs sold to cryptocurrency ‘miners’

NVIDIA Corporation will have to pay $5.5 million to the U.S. Securities and Exchange Commission (SEC) for failing to disclose a portion of its revenue growth came from the sale of gaming GPUs for crypto mining purposes. According to the SEC, the company hid this information for two consecutive quarters of fiscal 2018.

During this time, the company was vague in its financial statements, saying only that it experienced revenue growth in the gaming product business. Because the reason for the increase in revenue is unknown, investors are under-informed, unable to make clear decisions about future investments.

The SEC claims Nvidia misled investors by reporting massive increases in revenue related to “games,” concealing the extent of its success in the volatile crypto market. This means that Nvidia’s sales and revenue data doesn’t necessarily indicate reliable future growth, making investing riskier.

While Nvidia doesn’t mention cryptocurrency mining-related sales as a success factor in its gaming product division, it does mention crypto as a key factor in its games. other markets, which led the SEC to suspect that the company was not doing business properly.

And investors’ worries turned out to be well-founded. The sharp drop in crypto values ​​at the end of 2018 prompted Nvidia to cut its quarterly earnings forecast by $500 million and be sued by shareholders.

Nvidia fined $5.5 million for hiding the amount of gaming GPUs it sold to cryptocurrency miners - Photo 2.

Cryptocurrency mining has been cited as the cause of GPU shortages and Nvidia has launched a separate line of CMP GPUs specifically for this, trying to prevent video card shortages for gamers. .

However, Nvidia employees admit that many gaming GPUs will still end up in the hands of miners. “The company’s sales staff, especially in China, reported a significant increase in demand for gaming GPUs due to crypto mining.” SEC filings say.

“All issuers of shares, including those pursuing opportunities related to emerging technology, must ensure that the information they disclose is timely, complete and accurate.”said Kristina Littman, head of the SEC’s Crypto Assets section.

(According to Law and Readers, TheVerge)


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