NVIDIA Fined $5.5M For Inadequate Cryptomining Disclosures: SEC

America’s top financial watchdog – the Securities and Exchange Commission – has settled With NvidiaOver charges that the company had not properly reported the effects of crypto mining on its gaming operations. NVIDIA agreed to pay $5.5 million as a penalty without admitting or denying the SEC’s findings.

Inadequate Disclosures

According to the SEC’s press release, the chip manufacturer giant failed to fully disclose information concerning crypto mining as a significant source of revenue for its gaming business. The company has been a major supplier of advanced GPUs for mining facilities since 2017 when the demand for crypto increased.

The release states that NVIDIA included its revenue from GPU sales to crypto miners as part of its gaming business, but the company did not reveal that its “increase in gaming sales was driven in significant part by cryptomining” in its Forms 10-Q, as required by SEC.

NVIDIA also failed to disclose how demand for crypto affected other parts of its business. This led to the impression that NVIDIA’s gaming operations weren’t closely related with its mining involvement. The Commission considers such omissions of critical information have impeded investors from properly evaluating the company’s future performance.

Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, argued that NVIDIA’s failure to disclose critical information had deprived investors of the opportunity to evaluate its performance fairly. She stated:

“All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”

The Metaverse: Eyeing it

Apart from the many years of experience as a dominant chip manufacturer for Bitcoin mining equipment, NVIDIA is also looking at the emerging metaverse. NVIDIA announced earlier this year that it had a metaverse.Launched a program to help artists and content creators that focus on building virtual worlds or products for the metaverse.

Meanwhile, the giant said it would begin to distribute “Omniverse,” a software for creating virtual worlds and metaverse-ready objects. It allows users to create exchangeable worlds and assets on third-party markets.

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