The financial regulator has fined Nvidia millions of dollars. It’s all about mining
The US Securities and Exchange Commission (SEC) has secured a $5.5 million penalty against Nvidia. This is the result of lengthy proceedings surrounding the video card maker’s activities in 2018, when it failed to disclose all details of the impact of cryptocurrency mining on its business, the SEC said. Overall, graphics cards from Nvidia are in huge demand from many altcoin miners, even despite the fact that the company has previously tried to artificially limit the effectiveness of its devices in mining crypto. We tell you more about the situation.
We note that the popularity of video cards in mining has led to notable problems with the availability of the devices. Moreover, the company is aware of the situation and has repeatedly tried to rectify the situation. For example, resellers of the company's devices including limiting the maximum number of devices sold in one hand, well, Nvidia itself has tried to limit the performance of devices when mining coins.
However, unlocking their potential, thanks to the developers’ efforts, was eventually achieved. For example, in this article we told you how to fix the problem with lolMiner.
Why Nvidia got fined
In a recent Securities and Exchange Commission publication regarding the case, you can find the following quote.
Without admitting or denying the findings of the SEC, Nvidia has agreed to a cease and desist order and pay a fine of $5.5 million.
Note that paying a fine is a fairly popular outcome in similar cases. It has become particularly popular in proceedings against various cryptocurrency companies because of their methods of obtaining funding in the form of initial coin offerings or ICOs. In October 2019, for example, the crypto project EOS received a fine from the Commission. At the time, the penalty amounted to $24 million.
Nvidia graphics cards
According to Decrypt’s sources, Nvidia started mentioning cryptocurrency mining and its impact on its business back in August 2017. In July of that year, one of the company’s reports mentioned a 90 per cent increase in revenue from GeForce graphics cards alone due to the surge in the popularity of mining. On aggregate, however, the company made even more money. Here is the relevant replica.
Our revenue from PC component sales increased by about 200 percent mainly because of the high demand for graphics cards designed for use in mining cryptocurrencies.
Read also: Bitcoin miners reveal why Tesla should once again accept cryptocurrency as a means of payment.
So what was it that the Securities Commission didn’t like so much? The fact is that the key market for Nvidia is the video game industry and gamers. High-performance graphics cards are an almost indispensable component of every computer that is suitable for comfortable use by the average gamer. According to SEC spokesperson Christine Littman, Nvidia management has withheld accurate information about the impact of the popularity of mining on its activities in the aforementioned area.
Nvidia’s disclosure breaches deprived investors of critical information to assess the company’s business in a key market. All issuers, including those taking advantage of emerging technology opportunities, should ensure timely, complete and accurate disclosure.
Nvidia’s earnings
Nvidia didn’t seem to argue much with the Commission’s decision. The fine decided to pay, especially as it is almost “inconspicuous” amount against the background of Nvidia’s overall revenues. Recall, the company earned $16.67 billion in 2021, according to its recent financial report. In this case, the company did not have to deny and acknowledge the findings of the regulator, which, in fact, had a good effect on the manufacturer’s reputation.
In addition, the fine for the company in this case is not a bad outcome. First, as we have already noted, its size, given the scale of the giant’s operations, is relatively small. Secondly, the case has been dragging on for quite a long time, so now the manufacturer will obviously be able to work more calmly.
If you have video card from Nvidia or any other manufacturer, we recommend to use its power to earn cryptocurrency at 2Miners pool. The latter pools the power of its members, which means that you can get coins here even with just one card.
The business is now quite profitable. For example, according to 2CryptoCalc calculator, a day's work of one Nvidia GeForce GTX 1080 Ti on Etherium will bring about $1.71, not including electricity costs. And with almost 130,000 people now mining ETH on the pool, it's a really popular activity.
Nvidia GeForce GTX 1080 Ti mining returns
We think the outcome of this case for Nvidia can generally be considered positive. The company has now got rid of the burden of litigation and work with lawyers, so they can fully focus on production, marketing and other necessary tasks. We want to believe that as a result of the availability of devices will not be a problem, well, the topic of mining stops scaring investors of the company.
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