By Dean Seal

Nvidia Corp. will pay a $5.5 million penalty to resolve allegations that it wasn't upfront about how much of its revenue growth came from cryptocurrency mining.

The U.S. Securities and Exchange Commission said it settled charges against the technology company and claims that amid rising interest and demand for cryptocurrencies in 2017, Nvidia customers increasingly used its gaming-focused graphics processing units for cryptomining, in which miners are awarded cryptocurrency for verifying crypto transactions.

The SEC in its charges said that when the Santa Clara, Calif.-based company filed its quarterly reports in August and November of 2017, it failed to mention that cryptomining was a key factor in year-over-year revenue growth for its gaming business. That omission was significant because Nvidia was simultaneously telling investors that the rise in demand for crypto was driving success in its original equipment manufacturing business, the SEC said.

"Nvidia's disclosure failures deprived investors of critical information to evaluate the company's business in a key market," Kristina Littman, head of the agency's crypto enforcement unit, said in a statement.

Nvidia agreed to resolve the SEC's allegations without admitting or denying the agency's findings. The company declined to comment.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

May 06, 2022 10:54 ET (14:54 GMT)

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