Nvidia fined $5.5 million for allegedly failing to disclose exact GPU sales to crypto miners
Nvidia has agreed to pay $5.5 million to settle charges of unlawfully obscuring how many graphics cards it sold to cryptocurrency miners following a settlement with the US Securities and Exchange Commission.
The order claims Nvidia misled investors by reporting a boost in revenue related to “gaming,” but hiding how much of the success relied on the volatile crypto market. Nvidia has not admitted to any wrongdoing as part of the settlement, but agreed to stop any unlawful failures to disclose information.
The charges follow Nvidia’s financial reports for the 2018 fiscal. The US Securities and Exchange Commission noted that Nvidia saw a huge explosion in crypto mining-related sales in 2017, at a time the rewards of mining Ethereum dramatically grew. Crypto mining was widely reported as the reason behind GPU scarcity and Nvidia launched a separate CMP line for mining, attempting to prevent shortages for gamers. However, employees apparently acknowledged that many gaming GPUs were still being sold to miners.
“The company’s sales personnel, in particular in China, reported what they believed to be significant increases in demand for Gaming GPUs as a result of crypto mining,” The Verge quoted the US regulator as saying in its order.
Also Read | Garmin launches Vivomove Sport smartwatch with analogue face, OLED display: Details
Considering cryptocurrency’s boom-and-bust nature, this meant Nvidia’s sales figures didn’t necessarily indicate reliable growth for the future, making investing riskier.
“NVIDIA’s analysts and investors were interested in understanding the extent to which the company’s Gaming revenue was impacted by crypto mining and routinely asked senior management about the extent to which increases in gaming revenue during this time frame were driven by crypto mining,” the commission said.
Nvidia didn’t mention mining-related sales as a factor in the success of its gaming division. It mentioned crypto as an important factor in other markets, suggesting to the commission that it was being deceptive deliberately.
Also Read | OnePlus Nord 2T design, full specs leaked online hinting at imminent launch: Everything to know
Investor anxiety turned out to be well-founded as a crypto crash in late 2018 forced Nvidia to slash its quarterly earnings projections by a whopping $500 million and spurred a shareholder lawsuit.
