Northern Data Fights Fraud Lawsuit From Ex-Workers, mulls US IPO

American branches of the European Bitcoin mining company Northern Data have filed a motion to dismiss a lawsuit brought against them

Former executives of American branches of European Bitcoin mining company Northern Data are being sued by two ex-employees in the Central District Court of California.

The plaintiffs, Joshua Porter and Gulsen Kama, are accusing the company of falsely misrepresenting the strength of its financial condition to investors, regulators and business partners. They also allege that the firm was knowingly committing tax evasion to the tune of potentially tens of millions of dollars.

In response, a spokesperson for Northern Data refuted the allegations, saying the company is “contesting them vigorously to protect ourselves against false assertions which damage our company and our business.”

The company's legal team is arguing that the court lacks authority over the case, saying “Northern Data is not subject to general personal jurisdiction in California” as the company’s U.S. branches are incorporated in Delaware and based in Virginia.

The company also claims that Porter and Kama failed to provide enough specific details to back their accusations of fraud, calling the suit a “poorly veiled effort by former employees to extract additional compensation from Northern Data.” Addressing allegations of fraud, the company argues that Porter and Kama failed to specify exactly who was involved, what happened, when or where the fraud supposedly took place.

The former executives filed the lawsuit in early July, saying that they were fired from their roles after raising concerns about the company's financial practices. They are now seeking unspecified damages and a jury trial.

Meanwhile, Northern Data is reportedly mulling the possibility of conducting an initial public offering (IPO) for its combined artificial intelligence (AI) cloud computing and data center businesses in the U.S. next year, potentially valuing the entity between $10 billion and $16 billion.

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