Nvidia to Pay $5.5M to Settle with SEC on Crypto Mining 'Insufficient Disclosure' Case

The U.S. Securities and Exchange Commission (SEC) announced that it has settled charges against Nvidia for "inadequate disclosure." Many graphics cards used by crypto miners are produced by this company.

In a statement on Friday, the U.S. Securities and Exchange Commission (SEC) said Nvidia failed to disclose that cryptocurrency mining was a "significant contributor to its substantial revenue growth" based on GPU sales in fiscal 2018. The company has agreed to pay a $5.5 million fine and will be ordered to cease for disclosures required in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934 .

According to the SEC, Nvidia reported an increase in revenue from its gaming business in 2018, but there is also information attributing the increase to crypto mining. The company was required to report connections “related to volatile businesses,” and failing to do so would have misled investors by not disclosing the need for cryptocurrency mining.

“Nvidia’s failure to disclose has deprived investors of critical information to evaluate the company’s operations in key markets,” said Kristina Littman, chief of the SEC Enforcement Division’s Division of Crypto Assets and Networks. “All issuers, including those seeking emerging technology opportunities Publishers must ensure that their disclosures are timely, complete and accurate."

The SEC’s crypto enforcement unit’s action is the first since the government agency announced plans to expand its cyber division, including the crypto asset enforcement unit, by 20 people to improve “police misconduct in crypto markets.” The SEC reported in January that from 2013 to the end of 2021, it took 97 enforcement actions against participants in the digital asset market, resulting in approximately $2.35 billion in fines.

The SEC’s crypto enforcement unit took action for the first time since the government announced plans to expand its cyber division, including the Crypto Assets Enforcement Unit, by 20 people to better “monitor misconduct in crypto markets.” The SEC reported in January that it had taken 97 enforcement actions against participants in the digital asset market from 2013 to the end of 2021, costing them an estimated $2.35 billion in fines.

While Nvidia agreed to pay a fine in the SEC case and face enforcement action, the company has previously successfully fought similar charges in civil court. In March 2021, a federal judge granted a request by Nvidia's legal team to dismiss a lawsuit alleging that the GPU maker was "willfully reckless" in failing to disclose large amounts of money from crypto miner sales in 2017 and 2018. income.