Europe's Largest Bitcoin Miner Faces Scandal and Lawsuit

Europe's Largest Bitcoin Miner Faces Scandal and Lawsuit

Lucia Gomez
2 min read

Northern Data Scandal Rocks Crypto Industry, Threatens IPO Plans

Northern Data, Europe's prominent Bitcoin mining company, is facing a scandal following allegations of financial misconduct and tax evasion by its former executives, Joshua Porter and Gulsen Kama. The accusations, which include claims of "borderline insolvency" due to significant liabilities and a strained cash position, have sparked a legal battle in California.

Porter, the former CEO, and Kama, the ex-CFO of Northern Data's U.S. subsidiaries, have filed a lawsuit accusing the company of distorting its financial status and engaging in tax evasion. These revelations have surfaced as Northern Data considers an IPO for its AI division in the U.S., with a potential valuation of $16 billion. However, the company's auditor, KPMG, has expressed concerns about its financial stability.

Northern Data has postponed the release of its 2023 audited financials and appointed a new auditor, Liebhart & Kollegen, while its backer, Tether, has reaffirmed its commitment to maintaining transparency with investors.

Key Takeaways

  • Former Northern Data executives allege financial misconduct and wrongful termination.
  • The company faces a $30 million German tax liability with additional $8 million in liabilities, despite only having $17 million in cash.
  • Northern Data's monthly burn rate of $3-$4 million raises concerns about its financial solvency.
  • The scandal could impact the planned $16 billion IPO of the company's AI unit.
  • KPMG has flagged uncertainties about Northern Data's future due to liquidity issues.


The scandal surrounding Northern Data could significantly impact investor confidence and delay its AI unit's IPO plans. The company's precarious financial state and the potential legal repercussions may have broader implications for its market reputation and operational viability, affecting both Tether's support and KPMG's credibility.

Did You Know?

  • Borderline Insolvency:
    • Definition: A state where a company's liabilities surpass its assets or it struggles to meet financial obligations, often signaling a risk of bankruptcy.
    • Implications for Northern Data: With substantial liabilities, limited cash, and a high burn rate, Northern Data's financial position is at risk, raising concerns about its long-term sustainability.
  • Monthly Burn Rate:
    • Definition: A measure of how quickly a company depletes its cash reserves, indicating potential financial strain.
    • Implications for Northern Data: The company's significant burn rate suggests a limited timeframe for operations without additional funding, potentially leading to insolvency.
  • Going Concern:
    • Definition: The assumption that an entity will continue operating and meet its obligations.
    • Implications for Northern Data: KPMG's doubts about the company's ability to continue may affect investor confidence and its strategic initiatives, like the planned IPO for its AI unit.

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