Regulators Focus Attention on Crypto and AI Connections Following Northern Data Raids
- German prosecutors raided Northern Data AG, a Tether-owned firm, triggering a 12% stock drop amid legal scrutiny. - The company shifted from crypto mining to AI infrastructure but faces regulatory concerns over its crypto ties and governance disputes. - Tether's ownership and a potential $1.17B Rumble acquisition raise risks of reputational damage and stricter oversight for crypto-linked AI firms. - Market volatility intensified as prosecutors remain silent on investigation scope, leaving stakeholders in

German authorities have verified that law enforcement has searched the offices of Northern Data AG, a technology company listed in Frankfurt and primarily owned by
In recent years, Northern Data has shifted its focus from crypto mining to providing artificial intelligence (AI) computing infrastructure, now operating more than 22,000 AI chips at sites across Europe. The company recently entered into a partnership with G42, an AI enterprise based in Abu Dhabi, granting G42 access to half of Northern Data’s AI computing resources. This strategic move reflects a broader industry pivot as demand for AI technology accelerates. Nevertheless, the company’s background as a major provider of computing power for
Tether Holdings SA, which issues the world’s most widely used stablecoin (USDT), holds a controlling stake in the company, adding further complexity. Tether itself has long been under scrutiny from regulators over its reserve practices and transparency. Northern Data’s relationship with Tether has come under the spotlight again due to recent events, such as a possible all-stock buyout proposal from Rumble Inc.—a conservative video platform where Tether is also an investor. Should the $1.17 billion transaction proceed, it would represent a major consolidation of assets backed by Tether.
This new investigation follows a series of governance issues. In 2024, two ex-directors accused Northern Data of financial misstatements and tax fraud, claims the company refuted. The case was ultimately dismissed, but it exposed weaknesses in the company’s internal controls. Prosecutors have yet to indicate whether the current inquiry is connected to previous disputes, financial disclosures, or other issues entirely.
The searches highlight the regulatory challenges faced by companies operating at the crossroads of digital assets and new technologies. By moving into AI infrastructure, Northern Data has become a significant player in Europe’s fast-growing AI market, which is drawing large investments from both public and private sectors. However, any accusations of financial wrongdoing could trigger more intense regulatory oversight for firms with cryptocurrency backgrounds. For Tether, its association with Northern Data—while already dealing with its own legal hurdles—could further harm its reputation.
The market’s response was swift and negative. By mid-afternoon in Frankfurt, Northern Data’s shares had fallen 8%, deepening a downward trend that has lasted for several months. Observers point out that recent changes in company leadership, such as the elevation of COO John Hoffman to co-CEO, may be part of efforts to steady the business during turbulent times. Still, the raids have introduced fresh uncertainty, especially as the company considers a potential merger with Rumble and expands its AI infrastructure presence.
The final outcome of the investigation is still unknown, but its impact could reach beyond Northern Data. Should any wrongdoing be discovered, it may pave the way for tighter regulation of companies merging crypto roots with AI innovation. For now, the Frankfurt prosecutor’s office has not provided a timeline for its conclusions, leaving investors and stakeholders waiting for further updates as the weekend progresses.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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