Nvidia fined for hiding GPU sales to miners

Nvidia was fined $5.5 million by the US Securities and Exchange Commission (SEC) for concealing the amount of gaming GPUs it supplies to cryptocurrency miners.



The Verge quoted an SEC representative as saying that Nvidia was dishonest with investors in reporting revenue from the sale of GPUs for the purpose of cryptocurrency mining for two consecutive quarters of the 2018 fiscal year.




Nvidia's sales increased significantly in 2017, the same period that cryptocurrency miners made money from mining Bitcoin, Ethereum. However, the company was dishonest in its financial statements. They deceived investors that the sales growth was due to the gaming sector without mentioning the miner customer group





 

As the cryptocurrency market fluctuates wildly, Nvidia's inaccurate sales figures put investors at risk. In 2018, "crypto winter" hit, millions of miners had to go to bed, prompting Nvidia to abruptly cut its quarterly earnings forecast to $500 million. This action resulted in a lawsuit from the shareholders.


Nvidia does not admit wrongdoing but pledges to stop providing inaccurate information.


Kristina Littman, head of the SEC's crypto division, said: "All investors and issuers looking for opportunities related to new technology must be assured of the information they report. is timely, complete and accurate. Nvidia's case is an example of how important information is to investors in assessing a company's performance."


Previously, RBC analyst Mitch Steves estimated that from April to July 2018, sales of cryptocurrency mining equipment in the market reached $ 2.75 billion. In which, Nvidia accounts for 75% of the market share, the rest belongs to AMD and other brands. "Nvidia made at least $1.92 billion in graphics card sales for crypto mining instead of $602 million as reported by the company," Business Insider quoted Mitch Steves' analysis of Nvidia's financial statements. .


Cryptocurrency mining is generally seen as the cause of the global hunger for graphics cards. Nvidia once introduced a separate line of GPUs for miners to end the shortage of video cards among gamers.


However, the SEC reports obtained show that many of Nvidia's gaming GPUs are still shipped to miners. "The company's sales staff, especially in China, admit that many gaming GPUs are still sold to miners. Especially in China, reports show that demand for graphics cards has increased significantly due to cryptocurrency mining operations," the SEC stated.


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