EU Probes Northern Data Over $568M GPU Purchase Allegedly Used for Crypto Mining Amid Tax Evasion and Money Laundering Claims

European authorities are investigating Northern Data AG over allegations of tax fraud tied to the purchase of $568 million worth of high-performance GPUs, according to Bloomberg. The European Public Prosecutor’s Office (EPPO) is probing whether the company misrepresented the intended use of the hardware, suggesting it may have been used for cryptocurrency mining instead of AI computing—activities that qualify for different tax treatment. The investigation centers on three subsidiaries of Northern Data active between 2021 and 2024. Coordinated enforcement actions were carried out in Frankfurt and Boden, Sweden, resulting in the detention of four individuals suspected of involvement in a VAT fraud scheme totaling over €100 million. A senior employee from Northern Data’s Swedish operations was also questioned. Northern Data, which previously focused on crypto mining and once acquired hundreds of thousands of gaming GPUs for that purpose, shifted its business model after Sweden ended tax incentives for mining operations in 2023. The company now claims its infrastructure is dedicated to cloud computing, primarily serving AI workloads. However, prosecutors are scrutinizing whether the company exploited tax benefits by acquiring 10,000 Nvidia H100 GPUs at a discount—valued at $568 million—while using them for purposes that do not qualify for those benefits. The core of the case hinges on whether the company intentionally misrepresented its use of the hardware. Critically, experts point out that using H100 GPUs for cryptocurrency mining is highly impractical. The H100 is designed for AI workloads, featuring advanced tensor cores, support for FP8 and BF16 precision, and massive HBM3 memory bandwidth—none of which benefit most proof-of-work (PoW) mining algorithms, which rely on integer arithmetic and bitwise operations. Bitcoin mining is dominated by specialized ASICs, making GPUs obsolete for the network. Ethereum transitioned to proof-of-stake in 2022, ending GPU mining for that chain. While a few niche coins still support GPU mining, even then, consumer-grade graphics cards like Nvidia’s upcoming GeForce RTX 50-series offer far better cost efficiency and power performance than the H100. Even in rare cases where H100s might be used for short-term, opportunistic mining on a specific coin, the upfront cost and energy consumption make it economically nonsensical—especially when acquiring them at scale for such purposes. Northern Data has declined to comment on the money laundering allegations but maintains that its data centers are fully committed to cloud and AI computing. The investigation continues as authorities assess whether the company structured its operations to fraudulently secure tax advantages.