Tether-owned Northern Data accused of fraud by former execs

Tether, the world’s largest stablecoin, will be launched in late 2023. Announced The company had acquired a significant stake in Northern Data, a company that is primarily focused on bitcoin mining but has since expanded into artificial intelligence.

Since then, former executives at Northern Data’s North American subsidiary submitted It filed a lawsuit against Northern Data alleging securities fraud, tax evasion and whistleblower retaliation.

The lawsuit was filed by Joshua Porter, former CEO and president of the company’s North American subsidiary, Northern Data US, and Gulsen Khama, former chief financial officer of Northern Data US.

The lawsuit alleges that Northern Data regularly misrepresented its financial situation to investors despite concerns raised by executives including Porter and Kama about the parent company’s ability to pay. Those problems first surfaced in early 2023. KPMG insisted on conducting liquidity forecasts Before approving the audit.

Kama felt its financial situation had been misrepresented to KPMG, and as the contract with KPMG continued to be delayed, parent company founder and CEO Allush Thillainathan insisted the company find a new auditor, allegedly suggesting it didn’t matter who the auditor was because people didn’t care.

Thillainathan also allegedly told Cama that the legal and finance departments were acting as “obstructions” and impeding his ability to find new opportunities for the company, claiming that the departments’ sole purpose was to “execute negotiated deals without question.”

Additionally, the lawsuit alleges that Northern Data improperly managed the earnings of its North American subsidiaries, as the complaint explains:committed tax evasion worth potentially tens of millions of dollarsPorter reportedly argued that Northern Data should recognise its profits in the United States (and therefore pay tax accordingly), but management disagreed.

Read more: Tether teases new assets as old ones are forgotten

Both Porter and Kama claim they were fired from their jobs in retaliation for raising these issues.

Financial Times report Claim Tether is the majority shareholder of Northern Data. Owns 51% of shares.

Protos has reached out to Northern Data and Tether for a response to these allegations but has not received a response at the time of writing.

The allegations in the lawsuit mirror an earlier matter raised by German financial regulator BaFin in 2021. Alleged Allegations emerged that Northern Data engaged in market manipulation linked to false representations in 2019. BaFin referred the charges for possible criminal prosecution, but prosecutors decided not to take legal action.

Protos reached out to Tether for comment but had not received a response at the time of publication.

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