AML Software Sues Athena Bitcoin for Alleged Source Code Theft and Copyright Infringement
Bitcoin ATM Industry Shaken by Allegations of Corporate Espionage and Unlawful Acquisition
In a significant development that highlights growing tensions within the cryptocurrency infrastructure sector, AML Software has filed a lawsuit against prominent Bitcoin ATM operator Athena Bitcoin, accusing the company of attempting to misappropriate its proprietary source code. The 16-page complaint, submitted to court on Tuesday, details allegations of copyright infringement, trade secret misappropriation, and what AML describes as numerous other unlawful activities connected to Athena’s alleged effort to take control of approximately 3,000 Bitcoin ATM machines from a third-party operator beginning in 2023.
AML Software, an Illinois-registered company, develops the critical operational code that powers Bitcoin ATMs across the country—what the lawsuit describes as the “guts” of machines that enable customers to exchange cash for cryptocurrency. The company’s complaint emphasizes that this software is protected by copyright law, positioning the alleged theft as not merely a business dispute but a violation of intellectual property rights. The legal action names several defendants beyond Athena Bitcoin itself, including Jordan Mirch, who allegedly orchestrated the scheme. According to court documents, Mirch served as the “motivating force” behind a complex plan to obtain AML’s proprietary software through deceptive means, supervising and controlling companies allegedly involved in the misappropriation.
The Complex Chain of Events: From Struggling ATM Operator to Alleged Code Theft
The origins of this dispute trace back to the financial difficulties of SandP Solutions, a company that, according to the complaint, found itself unable to operate Bitcoin ATMs in Ohio due to regulatory restrictions. This limitation reportedly made it challenging for SandP to profitably maintain its network of approximately 2,800 Bitcoin ATMs. The lawsuit alleges that Mirch, in his capacity as CEO of Taproot Acquisition Enterprises, managed to acquire these machines through what AML characterizes as “fraudulent misrepresentations” and other unlawful conduct—actions that are reportedly the subject of a separate legal proceeding in Illinois.
These machines were allegedly powered by AML Software’s proprietary code. According to the complaint, Athena Bitcoin had previously explored the possibility of purchasing AML’s software but ultimately decided against pursuing such an arrangement for reasons not specified in the court filing. Rather than abandoning efforts to acquire the technology, the lawsuit claims that Mirch contacted and hired an AML Software developer as a consultant—not to develop new code, but allegedly to “wrongfully acquire AML’s copyrighted source code.” The complaint further alleges that despite never authorizing the sale of its proprietary technology, AML later discovered that Mirch and Taproot had established a side arrangement with Athena to transfer both the code and the 2,800 ATMs to the Bitcoin ATM operator. “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 states, suggesting the defendant had knowledge of the software’s rightful ownership.
Recent Settlement Agreement Raises Questions About Code Ownership
Earlier this month, Athena Bitcoin announced a $9 million settlement agreement that the company described as providing “immediate ownership of ATMs and source code,” while simultaneously terminating a revenue-sharing arrangement with Taproot and its affiliated entities. This settlement announcement takes on new significance in light of AML Software’s allegations that the code in question was misappropriated. If AML’s claims prove accurate, this settlement could potentially represent the culmination of the alleged scheme to obtain the proprietary software without proper authorization or compensation to its developer.
Despite this apparent business victory, Athena Bitcoin has experienced significant financial challenges in the broader market. The company’s stock, which trades over-the-counter, has plummeted approximately 84% year-to-date, though it did see a modest 5% increase to $0.0173 following the settlement announcement, according to Yahoo Finance data. This legal battle with AML Software comes at a particularly difficult time for Athena, as the company grapples with both declining market value and increasing regulatory scrutiny across multiple jurisdictions. According to its website, Athena currently operates approximately 3,600 Bitcoin ATMs nationwide, making it one of the larger players in this specialized sector of cryptocurrency infrastructure.
Broader Legal Challenges Facing the Bitcoin ATM Industry
The lawsuit from AML Software represents just one of multiple legal challenges currently facing Athena Bitcoin. In Washington, D.C., Attorney General Brian L. Schwalb recently filed a separate lawsuit against the company, alleging that Athena profits from scams targeting elderly individuals while imposing hidden fees as high as 26% on unsuspecting customers. These allegations point to growing concerns about consumer protection within the cryptocurrency ATM industry, which has expanded rapidly in recent years while operating in a regulatory environment that continues to evolve.
The Bitcoin ATM sector has increasingly drawn attention from law enforcement and regulatory authorities concerned about the potential for these machines to facilitate fraud or enable financial crimes. In some jurisdictions, local law enforcement has resorted to extraordinary measures in attempts to help victims recover funds lost to scams facilitated through cryptocurrency ATMs. However, legal outcomes in these cases have been inconsistent, with some U.S. courts determining that funds collected through ATMs legally belong to the machine operators regardless of the circumstances under which they were deposited. This regulatory uncertainty creates additional complexity for companies operating in this space and for consumers who may use these services without fully understanding the associated risks or lack of protections.
Legislative Response and Industry Implications
The growing concerns surrounding Bitcoin ATMs and cryptocurrency services have prompted increased attention from lawmakers across the political spectrum. While progressive legislators have vocally advocated for new consumer safeguards, conservative voices are also recognizing the need for clearer guidelines. Senator Cynthia Lummis (R-WY) recently announced plans to address issues within the cryptocurrency ATM sector through market structure legislation being co-sponsored with Senator Kirsten Gillibrand (D-NY), suggesting that bipartisan consensus may be emerging around the need for more comprehensive regulation of this rapidly evolving industry.
The outcome of AML Software’s lawsuit against Athena Bitcoin could have significant implications for intellectual property protection within the cryptocurrency infrastructure sector. As digital assets and related technologies continue to gain mainstream adoption, questions about code ownership, licensing, and the proper acquisition of technology assets will likely increase in both frequency and importance. This case highlights the tension between rapid business expansion and proper adherence to intellectual property rights in an industry where technological innovation represents a critical competitive advantage. For Bitcoin ATM operators, software developers, and investors in cryptocurrency infrastructure companies, the resolution of this dispute may establish important precedents regarding the protection of proprietary code and the consequences of alleged misappropriation in this specialized but growing segment of the financial technology landscape.
