Joshua Porter and Gulsen Kama, former executives of Tether-backed German tech company Northern Data, have taken legal action against the company, claiming they were wrongfully terminated for raising concerns about financial misconduct and tax evasion. The company, known for being the largest bitcoin miner in Europe and operating data centers for artificial intelligence, is facing allegations of misleading investors about its financial health and engaging in tax evasion amounting to potentially tens of millions of dollars.
Porter, who served as COO and later CEO of the U.S. arm of Northern Data, discovered the company’s financial troubles after his promotion. He uncovered a $30 million German tax liability, additional liabilities of nearly $8 million, and a monthly burn rate of $3-4 million, while the company only had $17 million in cash. Concerned about potential U.S. tax liabilities, Porter raised the alarm but was ultimately fired after his warnings were ignored.
Kama, who was the CFO of the U.S. subsidiaries before becoming the group’s CFO, also expressed concerns about accounting and securities fraud within the company. Despite her efforts to address these issues with senior management, including the CEO and COO, she was dismissed as a result of her whistleblowing activities.
The lawsuit filed by Porter and Kama seeks compensatory and special damages for their wrongful termination, with the potential for millions of dollars in liability for Northern Data. The company has yet to respond to requests for comment on the allegations.
A spokesperson for Tether, the company backing Northern Data, declined to comment on the legal proceedings but emphasized their commitment to maintaining trust and transparency with investors. Despite the ongoing legal challenges, Tether remains confident in the long-term prospects of the company and the sector as a whole.