America’s top financial watchdog – the Securities and Exchange Commission – has settled with Nvidia over charges that the company under-reported the impact of crypto mining on its gaming business. NVIDIA agreed to pay $5.5 million as a penalty without admitting or denying the SEC’s findings.
Inadequate disclosures
According to the SEC press release, the chipmaker giant has not disclosed all information regarding crypto mining as an important source of revenue for its gaming business. Since demand and interest in crypto grew in 2017, the company has been a major player in providing advanced GPUs to mining rigs.
The release states that NVIDIA included its revenue from GPU sales to crypto miners as part of its gaming business, but the company did not reveal that its “increase in gaming sales was driven in significant part by cryptomining” in its Forms 10-Q, as required by SEC.
Moreover, the authority found that NVIDIA did not specify how the demand for crypto affected the other part of its business, which gave the impression that its gaming operations were not closely correlated with its involvement. in mining. The Commission considers that such omissions of critical information prevented investors from correctly assessing the future performance of the company.
Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, argued that NVIDIA’s failure to disclose critical information had deprived investors of the opportunity to evaluate its performance fairly. She stated:
“All issuers, including those seeking opportunities involving emerging technologies, must ensure that their disclosures are timely, complete and accurate.”
Eyeing the Metaverse
Besides the years-long endeavors as a predominant chip manufacturer for Bitcoin mining facilities, NVIDIA is also eyeing the up-and-coming metaverse. Earlier this year, the company announced that it had launched a program to support artists and content creators who focus on building virtual worlds and products for the metaverse.
Meanwhile, the giant has announced that it will begin distributing “Omniverse”, software for creating virtual worlds and metaverse-ready objects. Users can use it to develop tradable assets or worlds on third-party marketplaces.
