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NVIDIA didn’t declare uptick in 2017 GPU sales was driven by cryptomining

The United States Securities and Exchange Commission (SEC) has dinged NVIDIA with a fine for failing to properly declare why it saw a rise in sales during 2017.

You may recall 2017 as the year that cryptocurrency was pushed into public conversation thanks to the massive gains Bitcoin saw during the period. This fervour inspired many to not only purchase Bitcoin, but mine it as well.

This requires, among other things, a beefy GPU that allows you to balance power consumption with monetary gains and that’s where NVIDIA enters the story.

The SEC says that for its 2018 fiscal year, NVIDIA reported “material growth in revenue within its gaming business” which sounds good, except those gains never came from gamers and NVIDIA knew it.

“NVIDIA had information, however, that this increase in gaming sales was driven in significant part by cryptomining,” the SEC wrote in a release.

The problem here is that by failing to disclose that the gains came from the volatile market of cryptocurrency, investors could have wrongfully thought that NVIDIA’s growth potential was more significant than it was.

“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” explained chief of the SEC Enforcement Division’s Crypto Assets and Cyber Units, Kristina Littman said in a statement. “All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”

For this misstep, NVIDIA has been fined $5.5 million and it has also agreed to abide by a cease and desist order.

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