The US authorities fined Nvidia Corp. $5.5 million on Friday for failing to adequately disclose to its investors how many of its GPUs were intentionally sold for crypto mining.
The US Securities and Exchange Commission claims that Nvidia failed to disclose that crypto mining accounted for a significant amount of its income in consecutive quarters during 2018. Cryptominers verify transactions with high-powered GPUs meant for gaming to unlock cryptocurrencies such as Bitcoin. The procedure needs a significant amount of computational power as well as a significant amount of electricity. Because of mining, GPUs were in low supply.
The Santa Clara-based company Nvidia did not acknowledge the findings but agreed to pay a $5.5 million civil penalty. According to the SEC, Nvidia was aware of how the GPUs were being utilized but deceived investors and analysts about the entire implications of crypto mining.
Nvidia reported record full-year sales of $9.71 billion in a press release for its fiscal 2018 financial results, up 41% from the previous year. The firm recorded record sales of $2.91 billion in the fourth quarter of 2018, up 34% from the prior year.
Nvidia’s founder and CEO, Jensen Huang, made no mention of crypto mining driving much of the strong sales results in a February 2018 announcement.
Looking into the Metaverse
NVIDIA is targeting the up-and-coming metaverse in addition to its years-long efforts as a leading chip producer for Bitcoin mining operations. The firm stated earlier this year that it had developed a program to help artists and content producers who work on virtual worlds and metaverse goods.
Meanwhile, the company said it would begin to distribute “Omniverse,” a program that allows users to create virtual worlds and metaverse-ready things. Users can utilize it in third-party markets to create exchangeable items or worlds.
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