Nvidia will have to pay the sum of 5.5 million dollars. The reason? Everything seems to indicate that the company had tried to hide how many GPUs had actually been sold for cryptocurrency mining; one of the great generators of the shortage of components and devices.
This has been considered by the Securities and Exchange Commission (SEC, for its acronym in English) of the United States. In their most recent report, they have announced new charges and agreements with the companyand are effective as of today.
According to comments from TheVergethe company led investors to believe that this increase was due to to a rise in sales related to the sector of the gaming. In this way, they planned to hide that, in reality, the rise in sales was due to the sale of graphics cards in the volatile cryptocurrency market.
The aforementioned medium collects that “Nvidia does not admit any wrongdoing as part of the settlementbut agrees to put an end to any illegal failure to disclose information.”
Nvidia’s “secret”
The charges have been applied after examining Nvidia’s financial reports for fiscal year 2018. Here, the SEC comments that the company experienced an “explosion” in sales of articles related to cryptocurrency mining. Especially when the rewards for mining the Ethereum coin was at its peak.
In fact, after pointing to cryptocurrencies as the main reason for the shortage of GPUs in the market, Nvidia began to launch its own line of graphics cards. oriented exclusively to this activity. In this way, he was trying to prevent scarcity for the players of the world.
However, many of the employees knew that much of the GPUs destined for gamers They would also be used in mining activities. “The company’s sales staff, particularly in China, reported what they believed to be a significant increase in demand for gaming GPUs as a result of cryptocurrency mining,” the commission comments in its report.
A growing dependence on cryptocurrencies
Of course, being a market as volatile as that of cryptocurrencies, the numbers that indicated the growth of Nvidia they did not offer any type of guarantee or confidence to investors. The outlet comments that the latter routinely asked how much Nvidia’s growth depended on cryptocurrencies.
NVIDIA analysts and investors were interested in the extent to which the company’s gaming revenue was affected by cryptocurrency mining, so they asked company management to what extent the increase in gaming revenue concept of games during this period was due to cryptocurrency mining.
United States Securities and Exchange Commission
Nevertheless, Nvidia decided to remain deaf to questions. While citing crypto as a major factor in some of its other markets, the company seemed to be actively ignoring it in its gaming division.
In the end, of course, investors ended up having reason to be afraid. When cryptocurrencies took their 2018 crash and weakened part of the Chinese market, Nvidia’s quarterly earnings projections they foundered at 500 million dollars.
NVIDIA’s disclosure failures deprived investors of information critical to evaluating the company’s business in a key market. All issuers, including those pursuing opportunities related to emerging technology, must ensure that their disclosures are timely, complete and accurate.
Kristina Littman, head of the SEC’s Crypto Assets and Cyber Unit