Nvidia will pay $5.5 million as part of a settlement with the SEC that it did not properly inform investors about how cryptocurrency miners were stoking demand for its graphics cards.
Nvidia failed to disclose how cryptocurrency mining drove growth in the second and third fiscal quarters of 2018, which took place in 2017, the SEC said in a filing.
Nvidia was aware that cryptocurrency mining was driving part of its business, according to the SEC filing.
The company’s sales staff in China at the time believed the increase in demand for gaming GPUs was because of miners, and Nvidia’s senior management wanted to go after the crypto mining market, according to the SEC filing
But cryptocurrency may have ended up being a distraction for Nvidia as demand grew for its graphics cards for their intended uses, gaming and artificial intelligence.
In 2021, Nvidia released new cards intended for mining called Cryptocurrency Mining Processor, and added software to its graphics cards to prevent them from being used for mining. Nvidia’s graphics cards were in extremely short supply in 2020 and 2021 as gaming demand driven by the pandemic prompted users to upgrade their home gaming PCs.
However, CMP sales have declined sharply since their introduction. In the most recent quarter, CMP revenue was only $24 million, down from $266 million in the August 2021 quarter.
“Our GPUs are capable of cryptocurrency mining, though we have limited visibility into how much this impacts our overall GPU demand,” Nvidia CFO Colette Kress said in earnings commentary in February.