Nvidia fined $5.5M for failing to mention crypto miners were some of its biggest customers for gaming GPUs
The US Securities and Exchange Commission (SEC) has fined Nvidia $5.5 million for failing to disclose how much cryptocurrency mining impacted its gaming GPU business.
The SEC holds that Nvidia failed to disclose that cryptocurrency mining was a «significant element» of its revenue growth during 2017, and hid the fact that this growth did not come directly from its gaming GPU business as the company claimed.
Nvidia may have been able to avoid this SEC fine by disclosing the potential impact from cryptocurrency mining on gaming GPU demand in its Form 10-Q filing, which the company is obliged to list risk factors to the business within, but failed to do so.
«Nvidia’s omissions of material information about the growth of its gaming business were misleading given that Nvidia did make statements about how other parts of the company’s business were driven by demand for crypto, creating the impression that the company’s gaming business was not significantly affected by cryptomining.»
Nvidia has agreed to a cease-and-desist order and will pay the $5.5 million penalty. However, the California-based company has not admitted or denied the findings of the SEC.
Just a note that you'll see the SEC refer to Nvidia's fiscal year 2018 in the SEC filings [PDF warning], but that roughly correlates to human earth year 2017—Nvidia's financial calendar is weird. That's actually an important detail, as 2017/18 was the peak of the major cryptocurrency mining boom prior to the more recent one in 2020/21. Just like the previous 18 months, it was difficult to buy a graphics card during 2017 as the profitability of cryptocurrency mining, namely ethereum, was sky high.
It didn't end well for Nvidia, though. The company responded to the high demand
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