AML Software, an Illinois-based company specializing in the development of Bitcoin ATM software, has filed a federal lawsuit against Athena Bitcoin Inc., a well-known operator of Bitcoin ATMs, alleging theft and misappropriation of its proprietary source code. The complaint, lodged in the U.S. District Court for the Southern District of Florida, represents the latest legal trouble for Athena Bitcoin, which is already facing multiple lawsuits concerning its business operations.
Details of the Lawsuit
The 16-page complaint accuses Athena Bitcoin of orchestrating a fraudulent scheme to illegally obtain AML Software’s copyrighted source code—the key software powering Bitcoin ATMs that enable cash-to-crypto transactions. According to AML, parts of this code are trade secrets, accessible only to developers who have signed confidentiality agreements. The lawsuit names several defendants, including Jordan Mirch, who allegedly manages businesses that use AML’s software without authorization and is described as the “driving force” behind the scheme to acquire 3,000 Bitcoin ATM machines from a third-party source starting in 2023.
The lawsuit contends that Athena Bitcoin sought to gain control of these machines which were running AML’s protected code through arrangements with entities like Taproot Enterprises and SandP Solutions. SandP Solutions had previously faced difficulties in Ohio regulatory matters, affecting its operation of 2,800 machines. Allegations include deceptive acquisition of these machines and code through misrepresentations and unlawful means. Notably, Athena initially showed interest in buying AML’s code but never completed the deal, instead allegedly engaging indirectly to gain access to the technology.
AML Software also claims that Athena was aware the source code being transferred through Mirch and Taproot belonged to AML, yet continued with the transfer without authorization. Athena is accused of copyright infringement, theft of trade secrets, and other illicit activities related to the scheme. AML Software emphasizes that it never consented to the sale or transfer of its code to Athena or associated parties.
Athena Bitcoin’s Legal and Financial Context
This lawsuit adds to Athena Bitcoin’s existing legal challenges, including a pending case filed by the Washington, D.C. Attorney General accusing Athena of failing to implement adequate safeguards against scams, which have resulted in consumer losses. Earlier in September, Athena announced a $9 million settlement aimed at securing immediate ownership of certain ATMs and their source code, while terminating revenue-sharing agreements with Taproot and affiliated entities.
Athena operates approximately 3,600 Bitcoin ATMs nationwide and has seen its stock price fluctuate amid these controversies. The stock, traded over-the-counter, experienced a modest increase following the news of the settlement but has declined over 80% since the start of the year.
Broader Implications for the Bitcoin ATM Industry
AML Software’s allegations highlight critical concerns about intellectual property protection and operational transparency within the Bitcoin ATM ecosystem. As Bitcoin ATMs continue to gain popularity for converting fiat currency to cryptocurrencies, disputes over proprietary software and machine ownership raise potential legal and regulatory scrutiny.
The lawsuit indicates a complex network of players leveraging corporate and franchise structures in attempts to control lucrative ATM operations, often amid claims of deceptive practices. Such disputes may impact customer trust and the regulatory environment for cryptocurrency-related services.
Statements and Responses
Definitions in legal filings and reports portray AML Software as the architect behind the software ecosystem used in Bitcoin ATMs, describing its code as the essential “guts” facilitating secure cash-to-crypto transactions. Jordan Mirch, implicated as a key figure in the allegations against Athena, has not responded to requests for comment.
Athena Bitcoin’s representatives have also yet to publicly comment on the latest lawsuit. Industry analysts suggest that if proven, the case could set a precedent for protecting proprietary software and trade secrets in this emerging financial technology sector.
Legal Proceedings and Outlook
The case is currently pending in federal court, where AML Software seeks damages and injunctive relief against Athena Bitcoin and associated defendants. The outcome of this lawsuit may influence future conduct concerning intellectual property rights in the cryptocurrency space.
Additionally, ongoing cases involving Athena Bitcoin in various jurisdictions, including actions by the Washington, D.C. Attorney General, paint a picture of a company under significant legal pressure. These concurrent battles illustrate the increasing regulatory and legal challenges for companies operating Bitcoin ATMs, amid concerns over compliance, fraud prevention, and intellectual property disputes.