Nvidia agreed to pay the SEC a $5.5 million fine for failing to disclose the impact of crypto mining on its gaming business | tech news

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In February 2021, we wrote about Invidia after the gaming chip giant unveiled its GeForce RTX 3060 processor chip for Ethereum mining. Also known as Cryptocurrency Mining Processor (CMP), the product is aimed at miners who would use traditional GPUs to mine ETH and other cryptocurrencies.

A little over a year later, the company is now in hot water for failing to disclose that crypto mining was a “significant element” of its revenue growth a year earlier.

Today, the US Securities and Exchange Commission (SEC) announced that Nvidia Corporation has agreed to pay $5.5 million to settle civil lawsuits over the chip giant’s understanding of the impact of crypto mining on its gaming business has not properly disclosed.

In a press release on its website, the agency said: “The SEC’s order notes that for consecutive quarters during NVIDIA’s fiscal 2018, the company failed to disclose that cryptomining was a significant element of its substantial revenue growth from sales of its graphics processing units (GPUs) designed and marketed for games. Crypto mining is the process of receiving crypto rewards in exchange for verifying crypto transactions on distributed ledgers. As demand for and interest in crypto increased in 2017, NVIDIA customers increasingly turned to their gaming GPUs for crypto mining.”

“NVIDIA’s disclosure failure has deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, head of the SEC’s Enforcement Division’s Crypto Assets and Cyber ​​Unit. “All issuers, including those pursuing opportunities related to emerging technologies, must ensure that their disclosures are timely, complete and accurate.”

Nvidia neither admits nor denies the SEC’s findings. Instead, the firm agreed to pay a $5.5 million civil penalty. A spokesman for Nvidia did not immediately respond to a request for comment.

In recent years, crypto mining has become a lucrative business as entrepreneurs see opportunities to mine their own bitcoins as bitcoin prices soar. Crypto mining is the process of earning crypto rewards in exchange for verifying crypto transactions on distributed ledgers, according to the SEC website.

“The SEC’s order finds that NVIDIA violated Section 17(a)(2) and (3) of the Securities Act of 1933 and the disclosure requirements of the Securities Exchange Act of 1934. The order also finds NVIDIA’s failure to maintain adequate disclosure controls and procedures. Without admitting or denying the SEC’s findings, NVIDIA agreed to an injunction and to pay a $5.5 million penalty,” the SEC wrote.



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