The Digital Chamber (TDC) has raised alarms about the U.S. Supreme Court’s decision to revive a lawsuit against Nvidia, warning that it could have severe consequences for the cryptocurrency sector.
The lawsuit, originally filed in 2018, accuses Nvidia of misleading investors about its GPU sales to cryptocurrency miners. The plaintiffs claim Nvidia downplayed over $1 billion in GPU sales related to crypto mining in 2017 and 2018. This controversy followed a significant drop in Nvidia’s stock price—nearly 30%—after the company announced in late 2018 that revenues would decline by 7%.
TDC claims that the class suit against Nvidia used an expert opinion that relied on “unsupported assumptions and inferences” about the crypto industry and Nvidia’s sales. In this case, the plaintiffs rely on non-evidence-based “expert opinions.” It explains that these opinions, based on general market research and unreliable or hidden assumptions, are not enough which undermines the purpose of the PSLRA.
“The impact will be felt the greatest by the most cutting-edge companies, like many in the cryptocurrency industry.” Notably, TDC’s members include industry crypto giants such as Crypto.com, Ripple and Binance.
TDC in its facts noted that 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.
TDC in its blog shared that ‘it felt compelled to weigh in due to the grave risks of more frivolous securities lawsuits based on nothing more than unfounded negative perceptions about the cryptocurrency industry and its high-growth business cycle.’
It emphasized that If the plaintiffs win, it will set a dangerous precedent, that will allow speculative and unsupported claims to succeed in court. This could lead to a surge in pointless lawsuits against companies in the cryptocurrency industry, which would suppress innovation by burdening them with costly litigation and would discourage investment.
TDC claims that this would undermine the very protections designed by the PSLRA to safeguard emerging tech industries from costly, speculative litigation.
Also Check Out: Crypto Legislation 2024: How GOP Senate Hopes to Reshape US Crypto Regulations
What do you think? Will the lawsuit succeed?
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