TLDR
- Northern Data, A leading Bitcoin mining entity in Europe is locked in a legal tussle sparked by former top officials.
- The firm's legal team is contesting the lawsuit, branding it as an act of 'legal exploitation.'
- Accusations from the former staff claim that Northern Data has been less than honest about its cash flow and resorted to unethical tax practices.
- The company fires back, suggesting that the unfounded claims come from displeased former employees who were ousted fairly and now aim to exploit the situation.
- Reports suggest Northern Data's AI division could soon step onto the US IPO stage, potentially valued as high as $16 billion.
Northern Data, a prominent name in Europe's Bitcoin mining scene, is currently under pressure as it deals with allegations raised by ex-executives seeking financial gain through what they describe as deceitful motives alleging misconduct and filing for dismissal in a Californian court, highlighting this as a classic instance of exploitative litigation.
The legal complaint brought by former employees Gulsen Kama and Joshua Porter accuses the company of deceiving investors and engaging in tax dodging tactics. They assert their termination followed after voicing these issues to their bosses.
In defending itself, Northern Data argues that the court in California doesn't have authority over the matter, naming its US-based subsidiaries' origins in Delaware and operational focus in Virginia. They also mention that the accusations fall short of necessary details.
Legal representatives for Northern Data pointed out in their court filing that Kama was dismissed due to substantiated reasons, while Porter was laid off following underperformance. Furthermore, they claimed ex-employees made unfair demands for 'severance packages' that were rejected, leading to the current legal challenge.
The legal filing also notes that this isn’t Kama’s initial whistleblower legal case against a previous employer. In 2019, she initiated a similar lawsuit against the tax service provider Jackson Hewitt, followed by another in 2023 against Quest Diagnostics, citing workplace unfairness.
These accusations have surfaced at an inopportune moment for Northern Data, as it's been suggested recently that the company eyes a public stock issuance stateside, involving its burgeoning AI arm, with potential valuation hitting the $16 billion mark.
Company attorneys highlighted the vulnerability of this timing in their filing, remarking that going public predicates on a stable business environment, and baseless public fraud allegations could seriously disrupt proceedings.
In their legal documentation, Kama and Porter suggested Northern Data bore tax due and other debts approximately totaling $8 million, balancing precariously with $17 million cash and a hefty monthly expenditure of $3 to $4 million.
“$30 million German The duo also stated that tax malpractices were rife in the firm’s early days, failing to set a corrective course, risking massive U.S. tax liabilities if subjected to scrutiny.
A company spokesperson staunchly denied these charges, commenting,
“It’s no accident these disgruntled former employees have raised allegations mere days after unfounded press chatter regarding our market strategy and just as we ready to share our 2023 results.”
Northern Data holds firm that its financial footing is solid and its growth plans are robust, forecasting revenue to more than triple by 2024. Its aim is to generate €214 million (approximately $233 million) through fresh equity issuance.
Proceeds are planned to further bolster its cloud offerings and extend its data center reach across Europe and America. also announced a 20% capital increase A court in Los Angeles is slated to hear discussions on dismissing the case on August 19, 2024.
The Chief Editor at Blockonomi, who also established Kooc Media, a UK-oriented online media platform. A strong advocate for Open-Source Software, Distributed Ledger Technologies like Blockchain, and an equitable internet space for all.
His insights have garnered recognition from Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch, and other major outlets. Reach out at [email protected]
