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Nvidia doesn’t want to give up its 2017 ‘crypto craze’ docs

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The legal representatives of technology company Nvidia have argued that its investors are not entitled to access its internal records about the “crypto craze” of 2017 and 2018.

During a trial in the United States’ Delaware Court of Chancery on Sept. 17, Nvidia’s counsel argued that the plaintiffs have failed to show a “credible basis” for why Nvidia should be compelled to hand over the requested company documents.

Nvidia is facing a class-action lawsuit alleging that it misled investors as to how much its revenue relied on crypto miners buying its graphics processing units amid the 2017 bull run.

Patrick Gibbs of Cooley LLP criticized the plaintiffs’ decision to “rest on a paper record” at trial without offering live testimony as to their purpose for demanding that Nvidia hand over its internal documents. He also argued that evidence has been presented proving that the investors behind the suit currently own stock in Nvidia and thus maintain an interest in the suit. 

The court advised both parties to submit post-trial briefings addressing Nvidia’s argument for why it should not hand over its internal records.

The lawsuit alleges that Nvidia made “false and misleading public statements concerning the company’s internal controls, prospects, and earnings.” The suit also levies accusations that Nvidia simultaneously sold $147 million worth of its shares “at artificially inflated prices.”

The investors allege that after launching its GPU dedicated to cryptocurrency in May 2017, the Crypto SKU, Nvidia solely attributed the sales of the SKU to miners to demand from miners. 

Additionally, the plaintiffs estimate that $1 billion worth of the company’s popular GeForce GPU sales that Nvidia claims were purchased by gamers in 2017 were actually purchased by crypto miners.

After the crypto bubble popped and demand from miners began to dry up, Nvidia’s struggled to offload its GPU inventories and saw a 30% crash in its stock price by the end of 2018.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.