US Government Backs Lawsuit Alleging Nvidia Misled Investors on Crypto Mining Profits

The SEC and the US Department of Justice are supporting a resurrected class-action lawsuit against Nvidia, alleging that the company misled investors about the profits it made from mining cryptocurrencies.

The lawsuit dates back to 2018 when investors accused Nvidia of overstating how much of its revenue was linked to the booming crypto mining sector.

DOJ and SEC Step In to Support Investor Claims Against Nvidia

In a significant move, both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have filed an amicus brief, providing evidence they claim substantiates the investors’ claims. They referred to Nvidia CEO Jensen Huang’s public statements in 2017 and 2018, where he reportedly minimized the impact of crypto mining on Nvidia’s profits, despite internal data showing otherwise. Their involvement adds weight to the lawsuit, giving the investors a stronger position in court.

A class action lawsuit accusing Nvidia of misleading investors about the role of crypto mining in its 2017-2018 revenue should be allowed to proceed in the U.S. Supreme Court, US officials argued Tuesday. https://t.co/Na7KER4PvA

— Decrypt (@decryptmedia) October 4, 2024

Ninth Circuit Revives 2018 Lawsuit Amid New Evidence

The original lawsuit was dismissed in 2021 by the Ninth Circuit Court of Appeals due to insufficient evidence.

However, in August 2023, a split decision by the same court reinstated the case, offering investors another chance to bolster their claims.

With the DOJ and SEC stepping in, the case is set to be heard by the Supreme Court in November.

The agencies are also requesting additional time to present oral arguments to further support their case.

Potential Fallout for Nvidia and Future Crypto Regulations

If Nvidia is found guilty of deliberately deceiving investors, it could have far-reaching consequences for the company and potentially reshape transparency regulations for businesses involved in cryptocurrency.

The lawsuit could lead to stricter requirements on how tech companies disclose their earnings tied to the volatile crypto market.

Nvidia has denied any wrongdoing, maintaining that its revenue disclosures were accurate and complied with existing laws.

The outcome of this case will be closely monitored by legal and financial experts, as it could set a precedent for how companies manage and report crypto-related revenues in the future.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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