AML Software Asks Federal Judge to Shut Down Athena Bitcoin's Software, Alleging $5.5 Million IP Theft Scheme

A federal court could force Athena Bitcoin to halt operations on every machine running disputed software after AML Software, Inc. filed a renewed emergency motion on February 27, 2026, alleging that Athena's developer orchestrated a "devious series of transactions" that turned a simple use-license into a fraudulent $5.5 million ownership grab — while simultaneously cutting off all revenue to the company whose code he was supposed to be managing.

This isn't a routine licensing dispute. If the court grants the preliminary injunction, Athena — one of only two publicly traded Bitcoin ATM operators (OTCID: ABIT) and already facing a DC Attorney General lawsuit over alleged consumer exploitation — could be forced to immediately stop running the software powering its BTM network. For an operator already under regulatory siege from multiple directions, an operational shutdown would be devastating.

What AML Wants the Court to Do

AML's renewed motion requests three specific forms of emergency relief, each one escalating in severity:

The third request extends well beyond the Athena dispute. AML alleges that Pineo — who managed the sublicensing of AML's software to multiple BTM operators — has been pocketing all licensing revenue since September 2025 and has "intentionally withheld information concerning the identity of the other licensees." If the court orders a full accounting, it could expose the entire network of operators running this software.

The Alleged Scheme: License to Ownership in Days

The factual narrative AML presents to the court is a case study in how informal business arrangements in the BTM industry can be exploited. According to the motion, AML — controlled by principal Sonny Meraban — spent at least $2.5 million and years of development building proprietary Bitcoin ATM software. Starting in 2023, AML began licensing the software on a non-exclusive, non-transferable basis, with payments based on approximately 1% of ATM transaction sales — a "rent to own" model where operators would make monthly payments with the option to eventually pay a lump sum for a fully paid-up license.

Ryan Pineo, AML's code developer, operated a Canadian company called Bitom Labs that served as an authorized middleman for sublicensing. Under the AML-Pineo arrangement, all licensing revenue was split 50/50. The sublicenses Bitom Labs could grant were limited to single-operator use of the software — no reselling, no modifications, no derivative works.

According to AML, what happened next was a rapid-fire daisy chain of agreements designed to convert a simple use-license into full ownership:

AML's argument about the nine-day delivery window is sharp: the AML Software took years to develop at a cost of $2.5 million. No one was "developing" anything in nine days. Bitom Labs simply handed over the AML Code, relabeled through a consulting agreement that carefully avoided the word "license."

The $3.5 million markup between the Bitom-PSBC transaction and the PSBC-Athena transaction is another red flag AML highlights. Mirch's PSBC essentially flipped the software for nearly triple the price within days. AML claims it never received 50% of the $5.5 million — or anywhere close to it — despite its revenue-sharing agreement with Pineo.

AML's Strongest Legal Card: The Copyright Act's Writing Requirement

AML's legal case rests on what it describes as a bright-line rule in copyright law. Under 17 U.S.C. § 204(a), a transfer of copyright ownership is not valid unless it is in writing and signed by the owner. This provision functions like the Statute of Frauds — it exists specifically to protect copyright holders from fraudulent oral claims of ownership.

It is undisputed that AML never signed any written document transferring ownership or IP rights to any defendant. AML argues this fact alone is dispositive. As the Eleventh Circuit held in Imperial Residential Design v. Palms Dev. Group: the chief purpose of Section 204(a) is "to protect copyright holders from persons mistakenly or fraudulently claiming oral licenses or copyright ownership." No writing from AML, no transfer. Period.

This argument extends to the "PSBC Code" that defendants claim is a modified version of the original. Under the Copyright Act, only the copyright owner holds the exclusive right to prepare derivative works. If PSBC created an unauthorized derivative — and AML argues the compressed timeline proves PSBC didn't even do that — the derivative receives no copyright protection. As the Third Circuit held in Dam Things from Denmark v. Russ Berrie, if someone copies a copyrighted work to create a derivative, "he is a copyright infringer, because in order to create his work he has copied the underlying work."

Multiple Paths to License Termination

Even setting aside the ownership dispute, AML argues that whatever license rights defendants may have once held are now dead through multiple independent legal mechanisms:

This belt-and-suspenders approach is legally sound strategy. Even if the court rejects one or two of these theories, AML only needs one to stick to establish that defendants are using the software without authorization — which makes continued use copyright infringement.

The Revenue Cutoff: A Financial Kill Shot

Perhaps the most immediately damaging allegation involves Pineo's alleged decision to cut off all licensing revenue to AML — not just payments from Athena, but from every AML licensee across the board.

Since licensing fees are AML's sole source of income, AML characterizes this as a deliberate strategy to financially cripple the company into submission. The motion alleges that Pineo has "intentionally withheld information concerning the identity of the other licensees," preventing AML from even knowing who is using its software or how much revenue is being generated.

AML frames this as irreparable harm that goes beyond typical financial damages: if the company's only revenue source is cut off, it will eventually become insolvent and unable to continue litigating. A later monetary judgment would be meaningless to a dead company. The motion asks the court to order Pineo to provide a full accounting and immediately turn over AML's 50% share.

This is the allegation that transforms the case from a two-party IP dispute into something with potentially industry-wide implications. If the court orders an accounting, the identities of every BTM operator running AML's software — and the revenues they've generated — would become part of the court record. For an industry that often operates on informal arrangements and handshake deals, that kind of forced transparency could be revelatory.

The DC Attorney General Connection

AML also raises a reputational harm argument that connects this IP dispute to the broader regulatory crisis engulfing Athena Bitcoin. The motion cites the DC Attorney General's September 2025 lawsuit alleging that Athena financially exploited consumers through undisclosed fees on deposits the company allegedly knew were the result of scams.

AML argues that Athena's continued use of AML-branded software while facing fraud allegations causes reputational damage that can't be quantified in dollars. It's a strategic argument — linking the IP dispute to Athena's growing regulatory problems to bolster the case for irreparable harm — but it also underscores a real risk for software providers in this industry: when an operator gets sued for fraud, the software vendor's brand gets dragged along.

Defendants' Likely Counter-Arguments

The defendants have not yet responded to this renewed motion, but their strongest card is likely ratification. AML's principal, Meraban, learned about the Athena arrangement in October 2024 and continued accepting payments for roughly 11 months. AML's motion frames Meraban's delayed reaction as "shock" and confusion rather than acquiescence — but the court will need to weigh whether continuing to accept payments for nearly a year constitutes implicit approval.

Defendants have already filed a Motion to Dismiss (December 22, 2025) and a Motion for Sanctions under Rule 11 (January 7, 2026), signaling they believe AML's claims lack legal merit. The sanctions motion in particular suggests defendants view AML's filing as frivolous — though motions for sanctions are common litigation tactics and don't necessarily reflect the merits.

The court will also need to consider whether a sophisticated software owner who accepts monthly payments for over a year while knowing — at least in general terms — about the arrangement can later claim to be a victim of fraud. AML attempts to preempt this by noting that Meraban's informal WhatsApp messages should not be construed as confirmation of Pineo's actions, but it remains defendants' strongest potential counterpoint.

What This Means for Athena Bitcoin Customers and Investors

What This Means for Operators

This case is a warning flare for every BTM operator that licenses third-party software — which is most of them. The central lesson is structural: AML's entire licensing business was built on informal arrangements, WhatsApp messages, and oral agreements. There was no written license agreement between AML and any defendant. The sublicensing authority granted to Bitom Labs was never formally documented. The result is a multi-million-dollar dispute where both sides can point to message fragments supporting their version of events.

Procedural Timeline

What to Watch For

This case is heading toward several inflection points that will determine not just Athena's fate, but could set precedent for how BTM software is licensed and controlled across the industry.

The injunction ruling. This is the immediate question. If granted, Athena faces an operational emergency. If denied, AML's leverage diminishes significantly, though the underlying claims would proceed to trial.

The ratification question. Can AML overcome the argument that Meraban knew about the arrangement and accepted payments for over a year? The motion frames his delayed reaction as confusion, not consent. The court's read on this could be decisive.

Where did the $5.5 million go? Athena paid $5.5 million. Bitom Labs was supposed to share licensing revenue 50/50 with AML. AML says it never received its share. The $3.5 million markup between the Bitom-PSBC and PSBC-Athena transactions — and who pocketed it — will be a central question in discovery.

The accounting order. If the court orders Pineo to disclose all licensees and revenues, it could expose the full scope of AML's licensing business and the identities of every BTM operator running this code. That information would have implications well beyond this individual case.

For Athena Bitcoin, this is another front in what's becoming a legal war of attrition. For the BTM industry, it's a reminder that the informal, handshake-deal culture that built this sector is now colliding with the formal requirements of copyright law, securities regulation, and state attorney general enforcement — all at the same time.

This article is based on AML Software, Inc.'s Renewed Motion for Preliminary Injunction and Incorporated Memorandum of Law (Document 67), filed February 27, 2026, in Case No. 1:25-cv-24378-RAR, U.S. District Court, Southern District of Florida. The defendants have not yet responded to this renewed motion. All allegations described are those of the plaintiff and have not been adjudicated by the court.