Graphics chipmaker NVIDIA Corporation (NVDA) has agreed to pay $5.5 million to settle charges leveled by the 澳洲幸﷽运5开奖号码历史查询:Securitiꦚes and Exchange Commission (SEC) that it failed to adequately inform investors about the demand cryptocurrency miners had placed on its graphics cards. 澳洲幸运5开奖号码历史查询:Crypto mining involves obtaining rewards earned in cryptocurrency for verifying transactions on distributed 澳洲幸运5开奖号码历史查询:blockchain ledgers.

The financial watchdog announced the charges on Friday, May 6, claiming that Santa Clara, California-based NVIDIA misled investors by failing to report that crypto mining had generated a significant amount of revenue growth in two consecutive quarters during its 2018 fiscal year from the sale of its 澳洲幸运5开奖号码历史查询:graphics processing unit (GPUs) designed and marketed for gaming.

The chip maker's gaming segment posted a year-over-year (YOY) surge in revenue of 52% and 25% in the second and third quarters of that year.

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

Specially Designed Chip for Crypto Mining

In March 2021, at the height of a crypto 澳洲幸运5开奖号码历史查询:bull market, NVIDIA released a new series of 澳洲幸运5开奖号码历史查询:semiconductors called Cryptocurrency Mining Processor (CMP), specifically designed for mining Ether (ETH), the digital token that powers the Ethereum blockchain. Ether's mining algorithms work particularly well on graphics cards—the chips the company is best known for. The semiconductor maker has also added software to its gaming graphics cards, which prevents them from being used for crypto mining.

During the pandemic, NVIDIA's graphics cards were in hot demand as consumers snapped them up to upgrade their gaming PCs while spending more time at home during shutdowns. Added demand from crypto miners meant the company's graphicಞs ch𓃲ips were in extremely short supply throughout 2020 and early 2021.

CMP Mining Chips Slump as Crypto Winter Descendওs

While gaming continued to make up the lion's share of NVIDIA's revenue in its most recently reported quarter (45%), sales for its CMP chips slumped sharply. The company disclosed that its crypto-mining hardware revenue declined 77% between the third and fourth quarters of 2021 as demand fell away in line with plunging cryptocurrency prices. Investors will get their next update on the chip maker's CMP sales when it 澳洲幸运5开奖号码历史查询:reports earnings on May 25. Conditions are likely to have remained challenging, given both Bitcoin (BTC) and Ether are tradꦓing down ar♋ound 30% since the start of the year.

NVIDIA shares shed 0.9% Friday, May 6, to their lowest level since last July. Year to date (YTD), the stock has fallen 36.5%, underperforming the iShares Semiconductor ETF (SOXX) by around 12% and the tech-laden Nasdaq by 14%.

Disclosure: The author held no positions in the aforementioned securities at the time of publication.