Nvidia Faces Class-Action Suit Over Crypto Mining Sales Claims

Nvidia is embroiled in a class-action lawsuit alleging it misled investors about the scale of its GPU sales to cryptocurrency miners. On Dec. 11, the U.S. Supreme Court dismissed Nvidia’s appeal to throw out the case, issuing a one-line order without explanation. This decision reinstates a Ninth Circuit appellate court ruling that revived the lawsuit, which had previously been dismissed by a California district court in March 2021. The lawsuit, filed by Nvidia shareholders, claims the company concealed over $1 billion in GPU sales to crypto miners. It also accuses CEO Jensen Huang of downplaying the volume of these sales to the industry. “We would have preferred a decision on the merits affirming the trial court’s dismissal of the case, but we are fully prepared to continue our defense,” an Nvidia spokesperson told Cointelegraph. “Consistent and predictable standards in securities litigation are essential to protecting shareholders and ensuring a strong economy, and we remain committed to supporting them.” The shareholders allege that Nvidia’s revenue was significantly bolstered by crypto miners during the 2018 market boom. When the crypto market crashed later that year, Nvidia’s sales fell sharply, causing its share price to drop nearly 30% over two days. In its defense, Nvidia argued that the lawsuit relied on fabricated information about its business and income. However, the Justice Department and the Securities and Exchange Commission opposed Nvidia’s appeal, stating, “This is not what occurred here.” The investors’ case reportedly includes evidence such as statements from former Nvidia executives and a Bank of Canada report alleging the company understated its cryptocurrency revenue by $1.35 billion. In 2022, Nvidia paid $5.5 million to the SEC to settle charges related to inadequate disclosures about crypto mining’s impact on its gaming business, though it did not admit to or deny the findings.