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SEC issues Nvidia $5.5m fine over inadequate cryptomining disclosures

Ponzi Scheme

SEC issues Nvidia $5.5m fine over inadequate cryptomining disclosures

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Chipmaker Nvidia, without admitting or denying, has agreed to pay a $5.5 million fine issued by the US Securities and Exchange Commission (SEC) over allegations that the company did not adequately disclose to investors the true impact of cryptomining on its gaming business.

The SEC report [pdf] found that during consecutive quarters in Nvidia’s 2018 fiscal year — as crypto prices boomed and a global chip shortage took hold — the company failed to disclose that its GPUs were increasingly being used for cryptomining and that this was a significant element of its material revenue growth.

“Nvidia’s senior management internally expressed a desire to capture the cryptomining demand, and at the same time shelter its gaming business from cryptominers and protect supply of GPUs for gamers,” said the SEC report.

Nvidia, as a result, launched a series of cryptomining processors that the company then marketed to crypto bros. The report alleged, however, that Nvidia workers knew that GPU sales — primarily in China — were increasing off the back of crypto miners.

“While the company could not track when and which specific gaming GPUs were purchased for the purpose of cryptomining, company personnel estimated using various assumptions that the impact of cryptomining was at levels that would indicate cryptomining was a significant factor in the…

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