Nvidia fined for failing to reveal all cryptomining sales

NVIDIA has been fined $5.5m (£4.4m) for failing to tell investors how much money it was making from cryptocurrency miners.

The penalty was imposed after US regulators ruled that the graphics card maker had failed to say how much it was making from sales to cryptomining enthusiasts during two quarters in its 2018 financial year.

Kristina Littman, of the SEC, said: “Nvidia’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market.”

The $470bn company, whose Geforce RTX graphics processing units are highly regarded by computer gamers, digital currency enthusiasts and artificial intelligence researchers alike, declined to comment.

It did not admit liability for wrongdoing, but paid the SEC’S $5.5m penalty and agreed to a cease-and-desist order.

Regulators said Nvidia misled investors by explaining in its financial statements how cryptocurrency sales had affected other areas of its business, but not gaming.

The SEC said this created the impression “that the company’s gaming business was not significantly affected by cryptomining”.

Although Nvidia has made significant gains from sales to cryptocurrency miners since the rise of digital currencies in the late 2010s, it turned against them when gamers – its core market – began complaining about supply shortages.

This culminated in Nvidia creating new features last year intended to make its RTX 3060 GPUS less efficient at cryptomining, and therefore less attractive to cryptomining buyers. But those efforts fell flat after cryptominers discovered an obscure piece of software which allowed them to bypass the intended restrictions.

Nvidia shares were largely unchanged at $188.