Nvidia fined $5.5 million for hiding the number of crypto miners customers

SEC says Nvidia did not properly report the risk of growing cryptocurrency demand during 2017

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The US Securities and Exchange Commission (SEC) has fined Nvidia $5.5 million for failing to disclose how cryptocurrency mining affected its business.

The SEC alleges that Nvidia failed to disclose that cryptocurrency mining was a “significant component” of its revenue growth during 2017 and concealed the fact that this growth did not come directly from its GPU gaming business as the company claimed.

Read Also: Nvidia hit with class action lawsuits following the cryptocurrency crash

Nvidia could have avoided this SEC fine by disclosing the potential impact of cryptocurrency mining on gaming GPU demand in its Form 10-Q filing, which the company is required to list risk factors for the business within, but it did not.

“Nvidia’s omissions of material information about the growth of its business were misleading, as Nvidia made statements about how other parts of the business were driven by cryptocurrency demand, creating the impression that the company’s video game business was not materially impacted by cryptocurrency mining.”

Ultimately, a $5.5 million fine is just a slap on the wrist for a company like Nvidia. The company had a profit of $26.91 billion in 2021, a 61% year-over-year increase.

Although it seems to have learned a lesson from the major cryptocurrency mining goldrush of 2017/18: it seemed to play it much safer with its response to the more recent boom in 2020/21, launching specially produced cryptocurrency cards and seemingly reserving stock for fewer miners.

Read Also: Nvidia Made Billions From Ethereum Crypto Mining Says Analyst

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