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SEC: Nvidia did not disclose crypto as revenue generating



NEW YORK (AP) — Nvidia, a major tech company that is expanding aggressively in the gaming space, will pay a $5.5 million penalty for failing to disclose that crypto mining is a significant source of revenue growth from the sale of graphics processing units manufactured and marketed. for the game.

Cryptocurrencies are highly volatile, and the Santa Clara, California company did not disclose to investors the potential future risks of such sales in 2018, the U.S. Securities and Exchange Commission said on Friday.

“Nvidia’s disclosure failures have deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, Head of the Crypto Assets and Cyber ​​Unit of the SEC Enforcement Division.

The SEC said the company also accepted a ceasefire order. Nvidia did not acknowledge or deny the SEC’s findings and declined to comment on Friday.

Crypto miners are compensated for verifying crypto transactions. According to the SEC, when the crypto craze began to spread in 2017, Nvidia’s graphics processing units designed and marketed for gaming were increasingly used by Nvidia’s customers to mine cryptocurrencies.

The SEC said the company reported significant revenue growth in its gaming business in 2018 and knew these sales were “significantly driven by crypto mining,” but did not disclose this in regulatory filings submitted to investors.

“These significant earnings and cash flow fluctuations associated with a volatile business for investors to identify the likelihood that past performance is indicative of future performance,” the SEC said.

Cryptocurrencies are a wildly volatile market. A more stable cryptocurrency compared to countless other cryptocurrencies, the price of bitcoin skyrocketed from around $35,000 in January to around $48,000 in March. By Friday, that price had dropped again to around $36,000.

The SEC said that Nvidia’s failure to disclose the impact of cryptocurrency on game sales is particularly misleading, as other parts of the company’s business have flourished due to demand for crypto, “creating the impression that the company’s gaming business has not been significantly impacted. crypto mining.”

Nvidia Corp. reported first-quarter earnings later this month.





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