A Costly Secret

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Even though human beings are by far the smartest species our world has ever seen, we do suffer from a fair share of limitations. These limitations have popped up on the surface time and time again throughout our history, producing detrimental effects under one capacity or the other. Nevertheless, it gets a little more serious once you start to realize how, at times, the stated limitations have also left us in a few unsalvageable situations. By doing so, they would force us to come up with a well-oiled defense mechanism, and that’s exactly how we’ll end up bringing regulatory bodies into the fold. Having a supervisory eye around each and every sector was a game-changer, as it made us more organized than ever before, but the utopia didn’t last for very long. With technology and its layered nature taking over the scene, the overall dynamics got back to favoring the rule breakers. This orchestrated a whole new set of problems. However, after much turbulence, we are now finally witnessing a response from the regulatory authorities, and a recent settlement involving Nvidia does a lot to make us optimistic about their case.

Nvidia has officially agreed to pay $5.5 million in settlement for charges that accused it of unlawful nondisclosure. According to certain reports, the company misled investors by deeming its gaming division as the reason behind a revenue boost, when, in reality, the GPU sales to cryptocurrency miners were really driving the stated uptick. The whole case dates back to 2017, which saw the industry suffering from a severe GPU scarcity. Everyone knew that crypto-mining was the reason for this shortage, so Nvidia created a separate CMP line just to cater the mining requirements. However, even after doing so, many employees noted that the company was still supplying a big chunk of its Gaming GPUs to the crypto community. If we talk about why Nvidia did it, the most plausible justification can be found within the fact that crypto, in general, has a volatile nature, hence the risk could’ve made investors a bit reluctant in terms of forking out their money.

“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, SEC Crypto Assets and Cyber Unit head. “All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”

Despite all the maneuvering, a crypto crash in 2018 will fail Nvidia’s plan. It slashed the company’s quarterly projections by a whopping $500 million, eventually setting the company up for a shareholder lawsuit.

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