Key Takeaways
- The Supreme Court upheld the lower circuit appeals court’s judgment in the Nvidia case.
- The Supreme Court dismissed Nvidia’s appeal to toss the $1B lawsuit.
- Nvidia is also facing an antitrust investigation in China.
The United States Supreme Court dismissed microchip giant Nvidia’s appeal to dismiss the $1 billion lawsuit against the company.
The lawsuit, dating back to 2018, alleged that the company understated its crypto-related revenue by $1.35 billion.
This, in turn, cost investors $3.8 billion as the shares recorded a 30% drop when crypto-driven GPU sales collapsed in late 2018.
SEC Backed $1B Lawsuit to Proceed
The U.S. Supreme Court has set the stage for a class-action lawsuit alleging Nvidia misled investors about its dependence on cryptocurrency mining. In an unsigned ruling, the court stated that it was a mistake to take up the case and rejected it as “improvidently granted.” Not a single justice disagreed with the ruling.
Conversely, this Supreme Court ruling supports a previous decision by an appeals court that permitted the majority of the case against Nvidia to proceed.
The Supreme Court ruling came only a few weeks after China started investigating the chipmaker for antitrust violations.
A company spokesman said, “We would have liked a decision affirming the trial court’s dismissal, but we are ready to defend ourselves.”
The Justice Department and the Securities and Exchange Commission (SEC) support the billion-dollar lawsuit against the chipmaker. Nvidia is now facing two legal battles with antitrust in two continents.
Growing Trust Issues for Tech Companies
Nvidia’s $1 billion lawsuit is similar to the one filed against Meta over a breach of Facebook data, alleging securities fraud. The Supreme Court dismissed Meta’s appeal to dismiss the case and ordered the lawsuit to proceed.
The lawsuit revolves around the data breach and the Cambridge Analytica saga.
The Supreme Court ruling has put Nvidia, one of the most valuable companies, in the crosshairs. However, it won’t be the first tech company to face such a lawsuit.
Nvidia, currently the most prominent firm in the world, is facing numerous legal challenges, and the matter has returned to the 9th Circuit Court.
This development in the Nvidia crypto mining sales case coincides with a Chinese antitrust investigation that may result in more billion-dollar fines.
People involved in the lawsuit claimed that it was only a matter of time before Nvidia faced the force of law. Others called it a major blow to the company’s trust value
The lawsuit demonstrates how firms’ disclosure of cryptocurrency operations and their effects on ordinary businesses are being scrutinized more closely.
However, despite the legal troubles, Nvidia continues to dominate the technology industry. Its dominance in the artificial intelligence and nano chip market has helped its stock price to soar by 180% this year.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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