Nvidia Faces Investor Lawsuit Over Crypto Misleading Claims

A class action lawsuit against Nvidia, alleging that the company deceived investors regarding the impact of crypto mining on its revenues in 2017-2018, is seeking to move forward in the U.S. Supreme Court.

According to U.S. Solicitor General Elizabeth Prelogar and SEC attorney Theodore Weiman, the allegations merit further consideration.

Investors claim Nvidia misrepresented its revenue growth by attributing it primarily to gaming while neglecting the substantial contributions from crypto mining. The Ninth Circuit Court of Appeals has partially reinstated the case after an initial dismissal, fueled by testimony from former employees.

One employee revealed that Nvidia kept a global record of GPU sales to crypto miners, while another noted CEO Jensen Huang’s direct involvement in discussions regarding crypto’s influence on sales figures. The legal authorities argue that Nvidia’s leadership was aware of the mining effects but chose to understate them publicly.

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Evidence from the Prysm Group and various testimonies suggest Nvidia’s significant exposure to crypto was inadequately communicated, especially following a sharp revenue decline after the 2018 crypto market crash. This combined evidence supports the assertion that Huang misled investors intentionally.

Originally dismissed in 2021 for lack of evidence, the lawsuit was revived in June after an amended filing. It emphasizes the importance of corporate transparency in disclosing emerging risks, particularly those related to cryptocurrencies.

Alexander Zdravkov