Nvidia didn’t tell investors enough about effects of crypto mining on its business, SEC says

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.

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The settlement represents the end to a saga in which Nvidia, best known for making graphics cards for gaming, found itself with a surprise revenue boost from cryptocurrency miners which later declined to become immaterial. Nvidia declined to comment.

Graphics cards, like those Nvidia makes, are well-suited to mine ethereum. In 2017, ether prices rose from under $10 to over $800, prompting miners to buy new hardware to cash in.

Nvidia’s gaming category, which is how the company reports those sales, rose 52% on an annual basis in the second quarter of its 2018 fiscal year (which ended June 30, 2017), and by 25% in the following quarter — but Nvidia failed to disclose cryptocurrency’s effect on that growth, the SEC says.