Amid preparations for a potential initial public offering (IPO), Northern Data is grappling with serious allegations of fraud from former executives who claim they were ousted for whistleblowing.
The European Bitcoin mining behemoth, endorsed by stablecoin issuer Tether, is at the center of a legal dispute as ex-executives Joshua Porter and Gulsen Kama have filed a lawsuit in the California Central District Court. They allege that the Frankfurt-based company misrepresented its financial health to investors, regulators, and business partners, and engaged in deliberate tax evasion amounting to potentially tens of millions of dollars.
Porter, terminated in March 2023, contends that Northern Data is on the brink of insolvency with substantial tax liabilities. Kama, dismissed three months later, accuses CEO Aroosh Thillainathan and COO Rosanne Kincaid-Smith of financial impropriety. The Financial Times reported that global auditor KPMG had also expressed concerns about the company’s liquidity position, prompting a shift to Liebhart & Kollegen.
Northern Data has not publicly responded to these accusations at this time.
Simultaneously, Northern Data is reportedly exploring the option of launching an IPO for its combined artificial intelligence (AI), cloud computing, and data center businesses in the U.S. next year. According to Bloomberg sources, the IPO could value the entity between $10 billion and $16 billion. The company is considering selling a minority stake in the unit to investors prior to the listing.
In September 2023, Tether announced a partnership with Northern Data focused on initiatives related to AI, peer-to-peer communications, and data storage solutions. While the financial details were not disclosed, Tether denied reports claiming it had purchased $420 million worth of 10,000 H100 GPUs from Northern Data.
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