In brief
- AML Software is suing Bitcoin ATM operator Athena Bitcoin
- Athena allegedly tried to steal AML Software’s source code.
- Athena also faces allegations of profiting from elderly scams.
AML Software, a company registered in Illinois, has sued Athena Bitcoin, accusing the Bitcoin ATM operator of trying to steal its source code, according to a complaint filed on Tuesday.
In the 16-page document, AML Software alleged that Athena engaged in copyright infringement, the misappropriation of trade secrets, and “a number of other unlawful acts,” while allegedly trying to overtake 3,000 machines from a third party starting in 2023.
Decrypt has reached out to Athena and AML Software’s lawyers for comment.
AML Software develops code that powers Bitcoin ATMs, and in its complaint, the company described that as “guts” of various machines letting customers exchange cash for crypto. The lawsuit notes that AML Software’s code is copyrighted.
The complaint named several defendants, including Jordan Mirch, who allegedly supervises and controls companies misappropriating AML’s Software in conjunction with Athena. The complaint alleges that Mirch was the“motivating force” behind the scheme.
Decrypt could not reach Mirch for comment.
Years ago, a company called SandP Solutions found itself in a difficult situation, the complaint said. The company was prohibited from operating Bitcoin ATMs in Ohio, making it difficult for it to turn a profit on 2,800 Bitcoin ATMs, the complaint added.
As the CEO of Taproot Acquisition Enterprises, Mirch allegedly managed to obtain SandP Solutions’ Bitcoin ATMs “through fraudulent misrepresentations to [the company] and other unlawful conduct,” which is subject to a separate lawsuit in Illinois.
The machines obtained by Mirch were allegedly being powered by AML Software’s code. At some point, Athena allegedly inquired about purchasing AML Software’s code, but it decided not to proceed with a deal for unspecified reasons.
An AML Software developer was then allegedly contacted by Mirch through Taproot and hired as a consultant. However, the complaint said that the individual was not hired to write new code but rather to try and “wrongfully acquire AML’s copyrighted source code.”
AML Software never authorized the sale of its code, but Mirch and Taproot allegedly set up a side deal with Athena to transfer it, along with the 2,800 ATMs, the Bitcoin ATM operator. According to Athena’s website, the firm operates 3,600 Bitcoin ATMs nationwide.
“It is believed that Athena was fully aware that the Source Code and software platform that Mirch and the Taproot Entities planned to transfer belonged to AML,” the complaint noted.
Under a $9 million settlement agreement earlier this month, Athena said that it was gaining “immediate ownership of ATMs and source code,” while eliminating a revenue sharing agreement with Taproot and its associated entities.
Athena’s stock, which trades over-the-counter, rose 5% to $0.0173 on Monday, according to Yahoo Finance. The company’s stock price has plummeted 84% year-to-date.
The company is facing a separate lawsuit in Washington, D.C., from Attorney General Brian L. Schwalb. He alleged earlier this month that Athena was profiting from scams against the elderly, while charging up to 26% in hidden fees for unwitting customers.
In some cases, local law enforcement has turned to brute force in trying to help victims recover funds lost to scams, but some U.S. courts have found the cash belongs to the ATM operator.
Although liberal lawmakers have been vocal about creating new safeguards, U.S. Senator Cynthia Lummis (R-WY) said on Tuesday that she plans to address the problem through market structure legislation being co-sponsored with Senator Kirsten Gillibrand (D-NY).
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