In late 2023, Tether, the world’s largest stablecoin, announced it was taking a significant stake in Northern Data, a firm that principally focuses on Bitcoin mining but has since expanded into artificial intelligence.
Since then, former executives of Northern Data’s North American subsidiary have filed a lawsuit against Northern Data, alleging securities fraud and tax evasion, as well as whistleblower retaliation.
Joshua Porter, the former CEO and president of Northern Data US, the company’s North American subsidiary, and Gulsen Kama, the former chief financial officer of Northern Data US, filed the lawsuit.
The lawsuit alleges that Northern Data regularly misrepresented its financial situation to investors, even as its executives, including Porter and Kama, raised concerns about the solvency of the parent company. These issues came to a head in early 2023 when KPMG insisted on performing a liquidity forecast before signing off on its audit.
Kama felt that the financials were being misrepresented to KPMG. As the engagement with KPMG kept being delayed, Aroosh Thillainathan, the founder and CEO of the parent company, allegedly insisted that the firm find a new auditor and suggested it did not matter who the auditor was, as people didn’t care.
Thillainathan also allegedly told Kama that the Legal and Finance departments were acting as “road blockers,” interfering with his ability to find new opportunities for the firm. He insisted that these departments were meant to “execute deals that were negotiated… no questions asked.”
Furthermore, the lawsuit alleges that Northern Data was improperly managing the revenue of its North American subsidiary, described in the complaint as ‘committing tax evasion to the tune of potentially tens of millions of dollars.’ Porter allegedly insisted that “Northern Data should recognize its profits in the United States (and thus pay taxes thereon).” However, management disagreed.
Read more: Tether teases new assets as old ones are forgotten
Both Porter and Kama also allege that they were fired from their positions as retaliation for raising these issues.
Financial Times reporting claims that Tether is the majority owner of Northern Data, owning 51% of the stock.
Protos has reached out to Northern Data and Tether for their response to these allegations, but at press, they have not responded.
The allegations in this lawsuit echo earlier issues raised by Germany’s financial regulator BaFin in 2021, which alleged that Northern Data had engaged in market manipulation related to misrepresentations in 2019. BaFin had referred the complaint for potential criminal prosecution, but prosecutors decided not to pursue the case.
Protos has contacted Tether for comment but had no response at time of publication.
Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.
This news is republished from another source. You can check the original article here
