NVIDIA was fined $5.5 million for its cryptocurrency mining regulations that were unsuitable.
To settle claims that it failed to disclose the impact of cryptocurrency mining on its gaming business, Nvidia NVDA 0.90% will pay a $5.5 million fine to the Securities and Exchange Commission.
According to an Nvidia whitepaper, income from its Crypto Mining Processor (or CMP) chip was $550 million in 2021, accounting for only 0.2 percent of the company’s overall revenue of $26.91.
Nvidia (NVDA) failed to disclose that cryptomining was a significant component of its revenue increase from the sale of its gaming graphics processing units (GPUs) over consecutive quarters in 2018, according to the SEC.
Nvidia consented to a cease-and-desist order and a $5.5 million penalty in exchange for not admitting or denying the SEC’s filing.
Nvidia declined to comment, according to a spokeswoman for the business.
During the second quarter of 2018, Nvidia’s gaming revenue climbed by 52% year over year, and by 25 percent in the third quarter.
Nvidia’s income from cryptocurrency mining-specific hardware fell 77 percent in Q4 2021, from $150 million in Q3 2021 to just $24 million in Q4.
During the relevant period, several Nvidia sales people conveyed their conviction that cryptocurrency mining was driving increased demand for the company’s gaming equipment, particularly in China, but the information was not disclosed to investors, according to the SEC.