Two former executives of Tether-backed German tech company Northern Data have filed suit against the firm, alleging that they were wrongfully terminated after raising concerns about the company’s financial health and alleging tax evasion.

Northern Data is the largest bitcoin miner in Europe. In addition to bitcoin mining, the company also operates data centers used for artificial intelligence.

In their recently unsealed California lawsuit, the two executives – Joshua Porter and Gulsen Kama – allege that Northern Data lied to investors about the strength of its finances, hiding the fact that it is “borderline insolvent,” and, additionally, is “knowingly committing tax evasion to the tune of potentially tens of millions of dollars.”

The allegations come amidst growing media buzz that Northern Data is considering a U.S initial public offering (IPO) of its artificial intelligence unit, which Bloomberg reported was valued at up to $16 billion.

Porter joined the U.S. subsidiary of Northern Data as COO and was later promoted to CEO of the U.S. arm of the company. Only after his promotion, the suit claimed, did Porter get a true look behind the curtain at the reality of the company’s financial situation. According to Porter’s suit, Northern Data had a “$30 [million] German tax liability and additional liabilities of almost $8 [million] while simultaneously having only $17 [million] cash on the balance and a monthly burn rate of $3 [million]-$4 [million].”

Porter also grew increasingly concerned about the company’s potential U.S. tax liabilities. The suit alleges that the firm committed “rampant tax evasion” in its early years and had no plan to take remedial measures to account for it. Porter worried that Northern Data’s U.S. tax liability “could easily be in the tens of millions of dollars” and, if it were to be audited by the Internal Revenue Service (IRS), it could wind up insolvent.

Porter took his concerns to his superiors at Northern Data. When his concerns “fell on deaf ears”, as his lawyers described, Porter threatened to escalate matters by going to the company’s board of directors. Shortly after, he said he was fired – a move his superiors strangely blamed on an “internal decision to eliminate the position of North American [COO]” – a position he had not held in months.

Kama, who started out as the CFO of the U.S. subsidiaries before being promoted the group’s CFO, reported similar concerns “regarding accounting and securities fraud” to her superiors at Northern Data – ”to no avail, because the CEO and COO were perpetuating the accounting and securities fraud,” the suit claims. Northern Data’s CEO is Aroosh Thillainathan and its COO is Rosanne Kincaid-Smith.

After repeated attempts to warn the company about the fraud it was allegedly committing, Kama claimed she was sacked in an act of illegal retaliation for her whistleblowing activities.

“Specifically, Kama was terminated for her admonitions that Northern Data was flagrantly violating securities and tax laws and her attempts to ensure Northern Data did not continue to make fraudulent representations in connection with the company’s audit process and to impose audit controls and governance procedures on Northern Data’s most senior management,” the plaintiffs’ lawyers wrote.

Porter and Kama’s suit is seeking compensatory and special damages for their alleged wrongful termination. Though a figure has not yet been named, their lawyers wrote in the complaint that Northern Data’s alleged activity potentially exposes them to “millions of dollars of liability.”

A spokesperson for Tether declined to comment on “ongoing legal matters” but added: “We reaffirm our commitment to our investors and stakeholders to maintain trust and uphold the principles that guide our operations. We’ve always operated with the highest standards of integrity and transparency and remain confident in the long-term potential of the company and sector.”

Northern Data did not respond to CoinDesk’s request for comment by press time.