The SEC fined Nvidia for not disclosing its mining impacts on the gaming business and now they have to pay $5.5 million penalties as we can see more today in our latest cryptocurrency news.

The chip manufacturer Nvidia paid the penalty for failing to disclose the impact of the crypto mining on the company’s gaming business. The SEC fined Nvidia for failing to disclose the impact of crypto mining on their gaming business in the two quarterly filings in 2018:

“Without admitting or denying the SEC’s findings, NVIDIA agreed to a cease-and-desist order and to pay a $5.5 million penalty.”

Nvidia started mentioning crypto mining and the impacts on the original equipment manufacturer business in August 2017. the company wrote in the quarterly filing for the three months that ended on July 30, 2017, and noted that the revenue for its GeForce products increased by 90% because of its popularity among miners:

“Our PC OEM revenue increased by approximately 200% due primarily to strong demand for GPU products targeted for use in cryptocurrency mining.”

US SEC Urges Companies, risks, users,

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The company hadn’t mentioned however that its gaming busienss also benefited from popularity among the crypto miners. The SEC’s cyber unit chief Kristina Littman said:

“Nvidia’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market. All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”

In 2018, the Nvidia Geforce FTX 580 was marketed for gamers and became quite popular among miners. The company however was still dubious of mining’s impact on the sales. After the demand for the graphic cards dropped, the Nvidia CEO Jensen Huang said it was impossible to know how much of the hardware was used by the miners. Huang added:

“My point is that we just don’t know — when we’re going through what we see as our own sales, and what the percentage of Bitcoin is in our own sales, what we don’t know is how much inventory AMD pushed into the channel. There’s no way for us to calculate that.”

In the quarterly report filed in 2018, for the three months that ended April 29 of the same year, NVIDIA credited the increase in the gaming revenue to eSports. The company wrote in the SEC filing:

“GPU business revenue was $2.77 billion, up 77% from a year earlier and up 12% sequentially, led by gaming and datacenter. Gaming revenue was up 68% from a year ago and down 1% sequentially. Gaming GPU growth was fueled by demand from gamers playing eSports, the momentum of the Battle Royale genre, and AAA cinematic games.”

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Source: https://www.dcforecasts.com/regulation/sec-fined-nvidia-for-not-disclosing-mining-impact-on-gaming-business/