Advocate Body Claims Nvidia Crypto Sales Case Could Trigger More Quirky Lawsuits

The crypto sales lawsuit between Nvidia and a class group ofinvestors has become more intense. The prominent crypto advocacy organization The Digital Chamber has backed AI chip maker's latest legal move.

The Digital Chamber is stepping in as amicus curiae in Nvidia's move to reverse the US Court of Appeals for the Ninth Circuit's decision from last year.

The crypto advocacy organization says the case could trigger more frivolous lawsuits in the crypto industry.

TDC Throws in Support for Nvidia in Crypto Sales Case

Nvidia moved to the US Supreme Court to overturn an August 2023 judgment by an appellate court in its legal battle with a group of investors. The appeal court sided with the investors over claims that Nvidia understated the number of GPUs it sold to cryptocurrency miners.

The Digital Chamber (TDC) filed an amicus brief supporting the chip maker's move to have the Supreme Court overturn the judgment.

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 TDC's brief believes that the suit against Nvidia used a professional opinion. However, the argument revolved around unsupported assumptions and inferences over Nvidia's sales and the crypto industry.

The filing explained that the plaintiffs failed to validate their claims because they couldn't highlight any specific and supporting evidence in testimony, presentations, documents, or internal material.

Additionally, the brief debated that accommodating this case would encourage more lawsuits to flood the judiciary system. It noted that such a trend would impact several top companies, especially in the crypto industry. TDC named some potential targets in crypto, including Binance, Ripple, and Crypto.com.

A part of the filing reads: There is nothing to stop other plaintiffs from hiring other experts to do the same thing. The greatest impact will be felt by the most cutting-edge companies like many in the cryptocurrency industry."

Moreover, TDC's CEO and founder, Perianne Boring, emphasized the need to enter the case, noting that it could pose significant risks for the crypto industry. He also believes the case could trigger more frivolous securities lawsuits due to baseless negative perceptions about crypto and its rapid growth business cycle.

Nvidia's Crypto Sales Lawsuit

In 2018, the class group of investors sued Nvidia, claiming that the firm deceived investors with reports of its GPU sales to crypto miners. The suit alleged that Nvidia released misleading statements, indicating over $1 billion in GPU sales between 2017 and 2018.

The plaintiffs also claimed that Nvidia's CEO downplayed the ties between gaming GPU sales and crypto mining, misleading investors and the public.

For its part, Nvidia has filed a brief with the US Supreme Court requesting that the floodgates" of lawsuits against the company be closed.

Similarly, TDC highlighted the implications if the plaintiffs win. It mentioned that their win would lay a dangerous precedent where speculative and unfounded claims triumph in court.

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