NVIDIA Fined $5.5M for Inadequate Disclosures in Cryptomining: SEC
The Securities and Exchange Commission charged NVIDIA with inadequate disclosures regarding the role of crypto mining in the company’s gaming business.
America’s top financial watchdog – the Securities and Exchange Commission – has settled with Nvidia over charges that the company under-reported the impact of crypto mining on its gaming business. NVIDIA agreed to pay $5.5 million as a penalty without admitting or denying the SEC’s findings.
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. Since the demand and interest in crypto rose in 2017, the company has been a major player in providing advanced GPUs to mining facilities.
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.
In addition, the authority has found that NVIDIA did not specify how the demand for crypto had affected the other part of its business, which gave an impression that its gaming operations were not closely correlated with its involvement in mining. 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.”
Eyeing the Metaverse
Besides the years-long endeavors as a predominant chip manufacturer for Bitcoin mining facilities, NVIDIA is also eyeing the up-and-coming metaverse. Earlier this year, the company announced that it had launched a program to support artists and content creators who focus on building virtual worlds and products for the metaverse.
Meanwhile, the giant said it would begin to distribute “Omniverse,” a software for creating virtual worlds and metaverse-ready objects. Users can use it to develop exchangeable assets or worlds in third-party markets.