The United States Securities and Exchange Commission, or SEC, has announced that it has settled charges against Nvidia – the company behind the graphics cards used by many cryptocurrency miners – in regards to a case of “disclosure”. inadequate”.
In a Friday announcement, the SEC said that Nvidia did not disclose that cryptocurrency mining was “a significant element of its material revenue growth” based on sales of its graphics processing units, or GPUs, during the fiscal year that it covered. 2018. The company has agreed to pay a $5.5 million fine and will be subject to a cease and desist order for violations of the Securities Act of 1933 and disclosures required by the Securities Exchange Act of 1934.
According to the SEC, Nvidia reported revenue growth around its business in 2018, but also had information attributing this increase to cryptocurrency mining. The firm was required to declare the connection “related to a volatile business”, and by not doing so was misleading investors by not disclosing the demand for mining digital assets.
“NVIDIA’s disclosure failures deprived investors of information critical to evaluating the company’s business in a key market,” said Kristina Littman, chief of the Crypto Assets and Cyber Unit in the SEC’s Division of Enforcement. “All issuers, including those pursuing opportunities involving emerging technology, must ensure that their disclosures are timely, complete and accurate.”
Today we announced charges settled against NVIDIA Corporation for inadequate disclosures concerning the impact of cryptomining on the company’s gaming business.
Formore:
— US Securities and Exchange Commission (@SECGov) May 6, 2022
The action by the SEC’s cryptocurrency enforcement unit was the first since the government agency announced plans to expand its Cyber Unit — which includes the Crypto Assets Enforcement Division — by 20 people in an effort to improve “policing.” of breaches in the cryptocurrency markets. The SEC reported in January that, between 2013 and the end of 2021, it has filed 97 enforcement actions against digital asset market participants, costing them approximately $2.35 billion in fines.
Although Nvidia has agreed to pay fines and face legal action in this SEC case, the firm has previously had success around similar accusations in civil court. In March 2021, a federal judge granted Nvidia’s legal team’s request to dismiss a lawsuit alleging the GPU maker had acted with “conscious recklessness” in failing to disclose that a significant amount of 2017 revenue and 2018 came from the sale of cryptocurrency mining cards.
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