Chipmaker Nvidia, without acknowledging or denying, has agreed to pay a $ 5.5 million fine issued by the US Securities and Exchange Commission (SEC) for allegations that the company did not adequately disclose to investors the true impact of crypto mining on her gaming business.
IN Report to the SEC [pdf] found that in consecutive quarters in Nvidia’s fiscal 2018 – as cryptocurrency prices rose and global chip shortages prevailed – the company failed to reveal that its GPUs are increasingly being used as cryptocurrencies and that this is an important element from its material income growth.
“Nvidia’s senior management has internally expressed a desire to capture the demand for crypto mining while sheltering its gaming business from crypto miners and protecting the supply of graphics processors for gamers,” the SEC report said.
As a result, Nvidia launched a series of cryptocurrency mining processors, which the company then launched on the crypto brothers’ market. However, the report claims that Nvidia employees knew that sales of graphics processors – mainly in China – are increasing from the back of crypto diggers.
“Although the company could not keep track of when and which specific graphics game processors were purchased for cryptocurrency purposes, the company’s staff estimated, using various assumptions, that the impact of crypto mining is at levels that would show that cryptocurrency mining is a significant factor. the year. growth in gaming revenue over the period, “the SEC report said.
The SEC report adds that the chipmaker has seen overall growth and an increase in gaming revenue over the same period last year. Nvidia’s game revenue increased 52% year-over-year for the second fiscal quarter of 2018 and 25% year-over-year for the third fiscal quarter 2018.
SEC Head of Crypto Assets and Cybernetics Christina Litman is added in a press release that non-disclosure of critical information deprived investors of the opportunity to adequately assess the company’s gambling business.
“All issuers, including those looking for opportunities involving emerging technologies, must ensure that their disclosures are timely, complete and accurate,” she said.
Meanwhile, the SEC announced last week that it would increase the size of its law enforcement units targeting crypto assets and cyber threats. The unit, formerly known as the Cyber ​​Unit and called the Crypto Assets and Cyber ​​Unit, will receive 20 additional team members, bringing the total number of units to 50.
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https://www.zdnet.com/article/sec-issues-nvidia-5-5m-fine-over-inadequate-cryptomining-disclosures/#ftag=RSSbaffb68
