Amid efforts to go public, Northern Data faces accusations of fraud from former executives who allege they were ousted for whistleblowing.

European Bitcoin mining giant backed by stablecoin issuer Tether, Northern Data, is embroiled in legal controversy as two of its former executives allege they were dismissed for raising concerns about fraud.

In a lawsuit filed in the California Central District Court, ex-Northern Data executives Joshua Porter and Gulsen Kama say the Frankfurt-headquartered company was “falsely misrepresenting the strength of its financial condition to investors, regulators and business partners,” adding that the firm “was knowingly committing tax evasion to the tune of potentially tens of millions of dollars.”

Porter, fired in March 2023, asserts that Northern Data is “borderline insolvent” with large tax debts. Kama, who was dismissed three months later, accuses Northern Data CEO Aroosh Thillainathan and COO Rosanne Kincaid-Smith of financial misconduct. As noted by the Financial Times, international auditor KPMG also “raised concerns about the liquidity position” of the company, which later resulted in a switch to Liebhart & Kollegen.

As of press time, Northern Data made no public statements on the allegations.

Meanwhile, Northern Data is reportedly mulling the possibility of conducting an initial public offering (IPO) for its combined artificial intelligence (AI) cloud computing and data center businesses in the U.S. next year. According to Bloomberg’s sources, the IPO is expected to value the entity between $10 billion and $16 billion, with the Frankfurt-headquartered weighing in on selling a minority stake in the unit to investors before the listing.

In September 2023, Tether announced a collaboration with Northern Data to focus on initiatives around AI, peer-to-peer communications, and data storage solutions. The stablecoin issuer didn’t disclose any figures related to the deal but refuted reports suggesting it had spent $420 million on 10,000 H100 GPUs from Northern Data.