The regulatory watchdog of the United States has stated that it has settled with Nvidia over “inadequate disclosures” of proceeds from crypto mining. Nvidia is a firm that makes graphics cards used by several crypto miners,
On the 6th of May, the agency stated that Nvidia refused to report that cryptocurrency mining accounted for “a major aspect of its revenue increase” during 2018. The revenue came from selling its graphics processing units (GPUs).
Nvidia Agrees To $5.5M Fine
However, the corporation has chosen to pay a fine of $5.5 million and will be subject to an order to stop operation due to breaches of the Securities Exchange of 1933 and 1934.
As reported by the SEC, Nvidia failed to disclose a gain in income from its gaming market in 2018 but did not provide information indicating that this increase was due to cryptocurrency mining.
The company was compelled to reveal the link because it was connected to the crypto industry which is an unstable sector. As stated by Kristina Littman, the head of the Crypto Assets and Cyber Unit under the watchdog’s Enforcement Division,
“NVIDIA’s omissions to disclose material information prevented investors from evaluating the company’s operations in an important market. It is the responsibility of all issuers, especially those that seek possibilities of employing new technologies, to make sure that their reports are made on time, in full, and accurately.”
The regulatory agency’s official Twitter page stated,
“Today we announce resolved charges against NVIDIA for insufficient disclosures about the effect of cryptocurrency mining on its gaming business.”
The SEC’S Crypto Asset Division
According to the watchdog, this is the first instance of action taken by its cryptocurrency enforcement unit after the regulatory agency revealed plans to expand its Cyber Unit. The unit has a Crypto Assets Enforcement Division, and the watchdog decided to add 20 individuals to monitor the crypto markets.
In January, SEC stated that between 2013 and 2021, it had launched 97 enforcement proceedings against the firms in the crypto asset sector, resulting in fines totaling about $2.35 billion. Although Nvidia decided to pay fines and face sanctions in this case with the SEC, the company originally had success in a civil court against claims of a similar kind.
Last year in March, a federal court approved the motion of Nvidia’s legal team to drop a complaint claiming that the GPU maker had operated with “conscious carelessness” in neglecting to disclose that a major portion of its income in 2017 and also 2018 stemmed from cryptocurrency miner sales.