Even as the cryptocurrency market continues to expand each day and the popularity of its assets is increasing, authorities in many countries are still continuing to exert regulatory pressure on this novel asset class and all those dealing with it.
One of them is the U.S. Securities and Exchange Commission (SEC), which has recently announced settled charges against technology company NVIDIA Corporation (NASDAQ: NVDA), over “inadequate disclosures concerning the impact of cryptomining on the company’s gaming business,” the agency said on May 6.
According to an SEC press release:
“The SEC’s order finds that, during consecutive quarters in NVIDIA’s fiscal year 2018, the company failed to disclose that cryptomining was a significant element of its material revenue growth from the sale of its graphics processing units (GPUs) designed and marketed for gaming.”
As the agency further explained, “NVIDIA customers increasingly used its gaming GPUs for cryptomining,” with the growing demand and interest in crypto in 2017.
The tech giant did report material growth within its gaming business but the SEC accused it of withholding that this increase “was driven in significant part by cryptomining,” along with the information about “these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance.”
Where the problem lies
As stated in the press release, the company was required to disclose such details and, according to Kristina Littman, the Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit:
“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market. All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”
Is SEC on an anti-crypto crusade?
Meanwhile, the SEC continues to wage a battle on another crypto-related front. Specifically, it is in the middle of litigation against Ripple Labs and two of its executives, which it accuses of selling over $1.3 billion in unregistered XRP tokens between 2013 and 2020.
Elsewhere, in mid-March, a group of U.S. congressmen appealed to the agency and its chair Gary Gensler, arguing that its crypto regulation and information-seeking practices were stifling innovation, as Finbold reported.
At the same time, Jan van Eck, the chief executive of global investment management firm VanEck, has expressed his belief that the SEC was holding the spot Bitcoin exchange-traded fund (ETF) hostage over failure to approve the product.