Tech giant Nvidia, which has aggressively expanded into gaming, agreed to pay a $5.5 million fine for failing to disclose cryptomining as a significant source of revenue growth.
According to the SEC, Nvidia failed to disclose that cryptocurrency mining accounted for “a significant portion” of its revenue growth during 2017, and that this growth did not come from its gaming GPU business as claimed.
Nvidia won’t admit any wrongdoing in the settlement, but it will stop any future unlawful failure to disclose information.
In 2017, Nvidia’s crypto mining sales increased dramatically as the rewards for mining Ethereum surged. Crypto mining contributed to GPU scarcity, and Nvidia launched a separate CMP line specifically designed for mining, in an attempt to prevent shortages for gamers. Although employees apparently admitted that many gaming GPUs were still going to miners.
“The company’s sales personnel, in particular in China, reported what they believed to be significant increases in demand for Gaming GPUs as a result of crypto mining,” the SEC order says.
A fine of $5.5 million is just a slap on the wrist for a company like Nvidia. In 2021, the company made $26.91 billion, an increase of 61% over the previous year.