The computing hardware maker NVIDIA agrees to pay $5.5m as penalty without admitting or denying the U.S. SEC’s charges claiming the company violated crypto mining disclosure rules.
According to the filing, NVIDIA failed to disclose that the crypto mining was a significant component of its material revenue growth from the sale of its graphics processor units (GPUs) for three consecutive quarters in fiscal year 2018.
NVIDIA knew crypto mining was fueling its growth, according to the SEC, but failed to include it in two of its 2018 Form 10-Qs, which is a quarterly report of financial performance.
The SEC’s order also finds that NVIDIA’s omissions of material information about the growth of its gaming business were deceptive.
Given that NVIDIA did make statements about how demand for crypto drove other parts of its business, giving the impression that crypto mining had little impact on its gaming business.
Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, stated “NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market.”
NVIDIA violated Section 17(a)(2) and (3) of the Securities Act of 1933, as well as the Securities Exchange Act of 1934’s disclosure provisions, according to the SEC’s ruling.
Brent Wilner of the SEC’s Crypto Assets and Cyber Unit led the investigation, which was overseen by Diana Tani and Ms. Littman of the Crypto Assets and Cyber Unit.
The SEC is very vigilant with anything crypto-related, and doesn’t spare anyone who violates the regulations. A day back, the SEC placed Chinese crypto mining rig maker Canaan, and 88 other Chinese companies on a pre-delisting list under the HFCAA Act.