Key Points
- Northern Data, a European Bitcoin mining giant, is accused of fraud by former executives.
- The company is considering conducting an initial public offering (IPO) for its combined AI cloud computing and data center businesses in the U.S. next year.
Northern Data, a major player in the European Bitcoin mining sector, is currently facing legal issues. Two of its former executives have lodged allegations of fraud against the company. They claim they were dismissed after raising concerns about fraudulent activities within the company.
Accusations of Fraud
Joshua Porter and Gulsen Kama, the former executives, have filed a lawsuit in the California Central District Court. They accuse the Frankfurt-based company of misrepresenting its financial status to investors, regulators, and business partners. They also claim that Northern Data was knowingly involved in tax evasion, potentially amounting to tens of millions of dollars.
Porter, who was let go in March 2023, described Northern Data as “borderline insolvent” with significant tax debts. Kama, dismissed three months later, leveled accusations of financial misconduct against Northern Data CEO Aroosh Thillainathan and COO Rosanne Kincaid-Smith. The Financial Times reported that international auditor KPMG had also “raised concerns about the liquidity position” of the company, leading to a switch to Liebhart & Kollegen. Northern Data has not yet publicly responded to these allegations.
Potential IPO
In the meantime, Northern Data is reportedly contemplating conducting an IPO for its combined AI cloud computing and data center businesses in the U.S. next year. According to sources cited by Bloomberg, the IPO could value the entity between $10 billion and $16 billion. Northern Data, headquartered in Frankfurt, is also considering selling a minority stake in the unit to investors before the listing.
In September 2023, Tether announced a partnership with Northern Data focusing on AI, peer-to-peer communications, and data storage solutions. The stablecoin issuer did not disclose any financial details related to the deal but denied reports that it had spent $420 million on 10,000 H100 GPUs from Northern Data.
