- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
Nvidia, a technology company which designs graphics processing units for games, has been under fire for allegedly having deceived its investors regarding cryptocurrency mining. The company has recently responded by claiming that the case filed against them by the company’s investors is baseless and has asked the US judge handling the case to dismiss the case.
Nvidia has detailed their side of the story, stating that the case against them is based on incorrect information by analysts over the company’s revenue and that the company is not affiliated with the analysts who have misled investors; hence, the company should not be held accountable.
The case against the company was filed on December of 2018 when the company’s investors were concerned after a steep decline in Nvidia’s share alleging that the company had deceived them about the crypto mining market, upon which the company relies. Nvidia has now been fighting against these allegations and stating that investors were misinformed by analysts who were using an faulty model that estimated static demand in gaming chips that are also employed by crytocurrency miners.
Nvidia’s business mainly focuses on the gaming sector but has opened a new demographic in recent years of cryptocurrency miners due to its increasing demand for GPUs. With the rise of crypto mining, especially Bitcoin mining, the company has decided to focus more on development of its hardware, which was launched over two years ago. However, the sales of crypto mining equipment was added to general business unit only, instead of to the gaming unit.
Crypto Mining Profits Were Not Linked to the Gaming Unit
Nvidia continued amassing profits from the gaming unit since many crypto miners were using GeForce gaming unit. Investors are accusing Nvidia of misleading them into thinking that digital currency mining gains were separate from high gaming revenues. They claim that they had been misinformed until August of last year when they realized that the gains from the gaming unit and gains from crypto unit were linked and that low demand for crypto miners obviously impacts gaming revenues.
The company’s investors are now suing Nvidia for misleading them into making wrong investment decision based on false information, which turned out to be financially damaging for them.
Nvidia is fighting against the allegations, stating that they are not responsible for the decisions that investors have made especially as they have picked up the information themselves. The company further asserts that they have been open and transparent with the data and since the investors cherry-picked information, the company should not be blamed. Nvidia concluded by saying that there is no evidence that the company’s actions were the cause of their financial losses.