Nvidia faces lawsuit over $1 billion in undisclosed crypto mining revenue

On March 25, a California federal judge certified an investor class in a securities lawsuit against Nvidia Corporation (Nasdaq: NVDA) and its founder and CEO, Jensen Huang.

The lawsuit accuses the company and its CEO of misleading shareholders about its gaming revenue during 2017 and 2018.

It specifically focuses on the portion of revenue that came from selling graphics processing units (GPUs) to crypto miners.

Founded in 1993, Nvidia is a technology company that became the world’s first company to hit $5 trillion in market capitalization last year.

With a market cap of $4.26 trillion currently, it is currently the world’s largest company.

Related: What is Bitcoin mining? Explained

During the 2017-18 boom, crypto miners often deployed GPUs manufactured by Nvidia for mining cryptocurrencies like Bitcoin (BTC).

It was in 2018 that Nvidia investors first sued Nvidia and Jensen Huang for allegedly understating over $1 billion in GPU sales tied to crypto mining.

The plaintiffs alleged that in 2018, the company’s earnings call and guidance cut on Aug. 16 and a revenue warning on Nov. 15 revealed the crypto mining exposure as shares dropped on both occasions.

In May 2022, NVIDIA agreed to pay a $5.5 million penalty to the Securities and Exchange Commission (SEC) for inadequate disclosures concerning the impact of crypto mining on the company’s gaming business.

Though the…