The US Securities and Exchange Commission (SEC) has imposed a fine of $5.5 million on GPU maker NVIDIA for failing to fully disclose the impact of cryptocurrency mining on its gaming business. As you may know, back in 2018-19, the mining boom led to a massive surge in GPU sales (and prices). This, ultimately resulted in a steep decline in revenue in the following quarters when the bubble burst and miners started flooding the market with used hardware. Both NVIDIA and AMD suffered from this phenomenon which was dubbed the crypto-hangover.
In a statement, the U.S. Securities and Exchange Commission reportedly said that NVIDIA’s failure to disclose that cryptocurrency mining (and the short-lived market it created) was a major driving factor behind its fiscal growth back in 2018 is why the chipmaker was penalized.
Obscuring the contribution of cryptomining to its GPU sales led to market analysts and investors misjudging the impact of a potential crash in Ethereum prices. The cryptocurrency crashed hard and investors lost a fair bit of money which prompted this response. (Rencenter.org)
NVIDIA hasn’t admitted or denied these charges and is yet to offer an official statement.
