Nvidia Corp. was charged by the U.S. Securities and Exchange Commission for not disclosing that cryptocurrency mining had significantly increased its revenues. Nvidia Corp. agreed to comply with a cease-and -desist order, and pay $5.5million penalty.
Nvidia Did Not Disclose Crypto Mining as a Major Element Of Its Material Revenue Growth
The U.S. Securities and Exchange Commission (SEC) announced settled charges against technology company Nvidia Corporation Friday “for inadequate disclosures concerning the impact of cryptomining on the company’s gaming business.”
The securities watchdog explained that during consecutive quarters in Nvidia’s fiscal year 2018:
It was not disclosed that the company’s material revenue growth came from sales of graphics processing units (GPUs), which were designed and promoted for gaming.
The SEC observed that cryptocurrency demand and interest rose significantly in 2017 with Nvidia customers using gaming GPUs to mine crypto coins.
According to the securities regulator, Nvidia knew that crypto mining had increased revenue but didn’t disclose this on Forms 10-Q like required.
Kristina Littman, chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, commented:
Nvidia’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market.
Without admitting or denying the SEC’s findings, Nvidia agreed to a cease-and-desist order and to pay a $5.5 million penalty.
This week the Securities regulator announced that its Enforcement Division focusing on cryptocurrency has been nearly doubled. A number of lawmakers and the SEC Commissioner have strongly criticised Gary Gensler, Chairman of SEC, for his focus on crypto enforcement rather than providing better regulation.
How do you feel about Nvidia being charged by the SEC for not disclosing the effects of crypto mining on their revenue? Please comment below.
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