Legal Challenges for Bitcoin Depot Inc.
Bitcoin Depot Inc.’s Canadian subsidiary is facing a significant legal challenge, having been ordered to pay $18.47 million in arbitration fees to Cash Cloud Inc., a cryptocurrency ATM operator that has recently declared bankruptcy. The ruling stems from a lengthy arbitration process that examined claims regarding the delivery of faulty hardware and poor software performance impacting thousands of ATMs operated by Cash Cloud.
Arbitration Proceedings
The arbitration proceedings, conducted by the Canadian Arbitration Association, took place over nearly a year, concluding in October 2025. Bitcoin Depot, based in Atlanta, issued a Form 8-K filing on Monday detailing the tribunal’s decision in favor of Cash Cloud, which once operated a substantial network of approximately 5,700 kiosks under the Coin Cloud brand. In their filing, Bitcoin Depot noted the tribunal’s award reflects the full extent of damages claimed by Cash Cloud, emphasizing that their subsidiary BitAccess intends to robustly contest the award.
Background of the Dispute
In August 2022, Cash Cloud had initiated the arbitration process following a Master Purchase Agreement signed in January 2020, alleging that BitAccess, which controls Bitcoin Depot’s software operations after a significant investment in 2021, failed to meet their contractual obligations. According to Cash Cloud, these failures led to numerous outages and substantial losses in revenue.
Bankruptcy and Additional Legal Complications
While Bitcoin Depot is attempting to challenge the arbitration decision, the company is also grappling with additional legal complications. Cash Cloud has filed for Chapter 11 bankruptcy in Las Vegas, attributed to debts exceeding $153.9 million, caused by a combination of equipment failures, a failing software agreement with BitAccess, a cyber attack, and alleged fraudulent activities involving its chief marketing officer. In this context, Cash Cloud has also initiated a separate lawsuit in U.S. Bankruptcy Court, seeking the same amount in damages as awarded in the Canadian arbitration. They contend that some of the claims in this lawsuit exceed the jurisdiction of the Canadian arbitration and involve additional damages linked to the same agreement.
Bitcoin Depot’s Response
In its filing, Bitcoin Depot asserted its belief that the U.S. court case lacks merit as well, promising to defend against it vigorously, particularly since it is closely related to ongoing arbitral proceedings. Despite these legal hurdles, Bitcoin Depot announced a strong performance for the third quarter of the year, revealing a 20% increase in revenue to $162.5 million compared to the previous year, and a remarkable 139% rise in net income to $5.5 million. However, there were declines quarter-over-quarter, with revenue down approximately 6% from Q2 and net profit down about 55%. As of September, the company oversees more than 9,000 Bitcoin ATMs across the U.S., Canada, and Australia.
Conclusion
As Bitcoin Depot continues to navigate this complex legal landscape, they face significant uncertainty, acknowledging the unpredictability of the outcomes in both the Canadian and U.S. legal arenas.
