Nvidia Fined $5.5 Million for Insufficient Cryptomining Disclosures

gamerant.com:

Over the past several years Nvidia's GPU business has expanded at incredible rates, due in large part to the widespread growth of cryptocurrency mining. Where Nvidia primarily creates GPUs for gamers, cryptominers used the same cards and had seemingly endless funds to acquire more. While gamers certainly recognized the cryptomining demand for Nvidia's GPUs had changed the market, Nvidia apparently wasn't as forthright. The SEC has penalized Nvidia a sum of $5.5 million due to insufficient disclosures regarding its cryptomining business growth.

In a statement issued by the SEC, it confirmed that Nvidia reported «material growth in revenue within its gaming business» via two official forms for fiscal year 2018. However, upon investigation, the SEC found that this growth in gaming-focused GPU sales was not a result of purchases within the gaming industry. Rather, it was driven «in significant part» by cryptomining, which the SEC requires companies to disclose in their fiscal reporting.

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The necessity of this reporting, according to the SEC, is important for investors in order to «ascertain the likelihood that past performance was indicative of future performance.» In other words, reporting that the growth was purely gaming-related rather than driven by the highly volatile cryptocurrency market was negligent to Nvidia's shareholders. That's why the SEC requires companies like Nvidia to properly disclose this information.

Further, the SEC found that Nvidia didn't fail to properly disclose its cryptomining-related business growth in error. The SEC states that Nvidia was clearly aware that the growth it associated with its gaming GPUs was actually driven by demand