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Bad crypto reporting: SEC fines Nividia $5.5m for undisclosed gaming growth

By Monte Stewart


Updated

Nvidia
The SEC has fined Nvidia for failing to adequately report gaming revenue growth related to cryptocurrency. - Photo: Shutterstock

Nvidia has agreed to pay a $5.5m fine after being charged with failing to report cryptocurrency mining revenue growth adequately, the US Securities and Exchange Commission (SEC) announced on Friday.

“The SEC’s order finds that, during consecutive quarters in NVIDIA’s fiscal year 2018, the company failed to disclose that cryptomining was a significant element of its material revenue growth from the sale of its graphics processing units (GPUs) designed and marketed for gaming,” the SEC said in a news release.

Nvidia customers increasingly used the company’s gaming GPUs for cryptomining after demand for and interest in cryptocurrencies rose, added the SEC. But the company did not fulfill its requirement to properly disclose significant earnings and cash flow fluctuations that could have helped investors “ascertain that the likelihood that past performance was indicative of future performance."

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The regulator also found that Nvidia’s omissions of material information about the growth of the gaming business misled investors, given that the company made statements about how other parts of the business were driven by demand for crypto.

“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, chief of the SEC enforcement division’s crypto assets and cyber unit. “All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”

XRP/USD

0.53 Price
-2.400% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Gold

2,411.42 Price
-0.180% 1D Chg, %
Long position overnight fee -0.0191%
Short position overnight fee 0.0109%
Overnight fee time 21:00 (UTC)
Spread 0.60

ETH/USD

3,193.91 Price
+0.980% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

BTC/USD

60,021.00 Price
+2.520% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Between 2017 and 2018, Nvidia also received information indicating that cryptomining was a “significant factor” in the company’s year-over-year gaming GPUs revenue, states the SEC order requiring the $5.5m fine. Some sales personnel, particularly in China, reported what they believed to be a significant cryptomining-related increase in GPU demand.

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Big rise

Meanhile, the price of ether, the coin backed by the Ethereum blockchain network, skyrocketed to more than $800 from under $8 between 1 January 2017 and 1 January 2018.

Nvidia has declined to comment on the fine.

 

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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