Aug 22, 2024 at 06:00The Digital Chamber (TDC), an advocacy group for the cryptocurrency industry, has voiced its support for Nvidia in a legal battle with its investors, arguing that the outcome of the case could significantly impact the crypto sector. The U.S. Supreme Court is considering whether to allow a revived class-action lawsuit against Nvidia to proceed, a move that TDC claims could expose the entire crypto industry to a surge of “frivolous securities lawsuits.”
In an amicus brief filed on August 20, TDC urged the Supreme Court to overturn a lower court’s decision from August 2022, which reopened a lawsuit alleging that Nvidia had misrepresented the extent of its GPU sales to cryptocurrency miners. According to TDC, the suit, based on flawed expert opinions and assumptions about the crypto industry, poses a broader threat to companies within the space.
Perianne Boring, TDC’s founder and CEO, emphasized that the group felt the need to get involved due to the potential increase in baseless securities lawsuits targeting companies linked to cryptocurrency. TDC’s brief argued that the lawsuit against Nvidia was built on speculation, with no concrete evidence or internal documentation supporting the claims that the company had downplayed its sales to crypto miners.
The lawsuit, originally filed in 2018, accuses Nvidia of concealing over $1 billion in GPU sales to cryptocurrency miners. The plaintiffs claimed Nvidia’s CEO, Jensen Huang, publicly minimized the company’s involvement in the crypto sector, a fact they say became evident when the crypto market downturn coincided with Nvidia’s declining financial performance.
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TDC contends that the case fails to meet the standards of the Private Securities Litigation Reform Act (PSLRA) of 1995, which requires securities lawsuits to clearly outline misleading statements, explain why they are false, and present supporting facts. TDC warned that a ruling in favor of the plaintiffs could set a dangerous precedent, encouraging unsupported legal claims against emerging technology firms, particularly those in the cryptocurrency space.
The advocacy group added that a wave of similar lawsuits would burden crypto companies with costly litigation, stifle innovation, and deter investment in blockchain technology. TDC’s membership includes notable crypto companies such as Crypto.com, Ripple, and Binance.
Ultimately, TDC stressed that allowing the case to proceed would undermine the protections established by the PSLRA, which was designed to safeguard high-tech, cutting-edge industries.
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