uTether-Backed Crypto Firm Faces Fraud Accusations From Former Executives 🚨
Northern Data, a prominent crypto and AI infrastructure company backed by Tether, is facing serious fraud allegations from two former executives. The lawsuit, filed in California, accuses the company of financial misrepresentation and tax evasion. These allegations have potentially far-reaching consequences, threatening not only Northern Data’s operations but also its plans for a multi-billion dollar US IPO.
The case raises significant concerns about transparency and accountability in both the cryptocurrency and AI sectors. If proven true, these allegations could severely impact investor confidence in these industries. Moreover, it may lead to increased regulatory scrutiny, potentially reshaping the landscape of crypto and AI businesses.
Details of the Lawsuit and Financial Irregularities
The lawsuit against Northern Data was filed by Joshua Porter and Gulsen Kama, former high-ranking executives of the company. They claim they were terminated after raising concerns about alleged financial misrepresentation and tax evasion by Northern Data’s CEO and COO.
According to the plaintiffs, Northern Data was falsely portraying its financial strength to investors, regulators, and business partners. They allege that the company was “borderline insolvent” with significant tax liabilities and limited cash reserves. Specifically, they claim Northern Data had a $30 million German tax liability and additional liabilities of almost $8 million, while having only $17 million in cash and a monthly burn rate of $3-4 million.
The lawsuit also accuses Northern Data of “rampant tax evasion,” potentially owing tens of millions of dollars in US taxes. These allegations are particularly damaging as Northern Data was reportedly exploring a US IPO for its AI cloud computing and data center businesses, with potential valuations ranging from $10 billion to $16 billion
Further raising suspicions, the complaint details concerns raised by KPMG, Northern Data’s former auditor.
