A legal case between Nvidia and a group of its investors, now allowed to proceed by the U.S. Supreme Court, could have significant implications for the cryptocurrency industry, according to advocacy group The Digital Chamber (TDC).
On August 20, TDC, previously known as The Chamber of Digital Commerce, filed an amicus brief supporting Nvidia’s request for the Supreme Court to overturn a lower court’s decision from last August.
The appellate court’s decision reignited a lawsuit accusing Nvidia of downplaying the extent of its GPU sales to cryptocurrency miners. TDC warned that the case could lead to a surge of “frivolous securities lawsuits” targeting the crypto sector.
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Nvidia Lawsuit Could Harm Crypto
In the filing, Perianne Boring, founder and CEO of TDC, said the group felt it was necessary to intervene due to the “grave risks of a potential increase in frivolous securities lawsuits based on nothing more than unfounded negative perceptions about the cryptocurrency industry and its high-growth business cycle.”
TDC’s brief criticized the class-action suit against Nvidia, arguing that it relied on an expert opinion based on “unsupported assumptions and inferences” regarding the cryptocurrency industry and Nvidia’s sales figures.
The brief pointed out that the plaintiffs failed to produce any specific documents, presentations, testimonies, or internal materials to substantiate their claims.
“There is nothing to stop other plaintiffs from hiring other experts to do the same thing,” TDC warned. “The impact will be felt most acutely by cutting-edge companies, particularly in the cryptocurrency industry.”
Originally filed in 2018, the lawsuit alleges that Nvidia concealed over $1 billion in GPU sales to cryptocurrency miners and that CEO Jensen Huang publicly downplayed the company’s involvement in the sector.
The suit claims that the connection between Nvidia’s sales and the crypto market became apparent only after both experienced a simultaneous decline.
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TDC Claims Nvidia Lawsuit Fails to Meet PSLRA Standards
TDC, whose members include industry crypto heavyweights such as Crypto.com, Ripple, and Binance, argues that the case fails to meet the standards set by the Private Securities Litigation Reform Act of 1995 (PSLRA) designed to protect emerging technologies.
THE FACTS: The Private Securities Litigation Reform Act of 1995 (#PSLRA) was passed by Congress to curb the surge of frivolous lawsuits, offering protection to growing tech companies by imposing stricter requirements on private plaintiffs pursuing securities class actions.
— The Digital Chamber (@DigitalChamber) August 20, 2024
The act requires that lawsuits clearly identify each allegedly misleading statement, explain why it is misleading, and provide supporting facts—criteria that TDC claims this suit does not fulfill.
The group cautioned that if the plaintiffs win, it could set a precedent for speculative and unsupported claims to succeed in court. This could lead to many lawsuits against crypto companies, burdening them with costly litigation and discouraging investment.
“Ultimately, this would slow the growth of blockchain technology and undermine the protections the PSLRA was designed to provide for emerging, high-tech industries,” the group warned.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
