Chicago Atlantic's dispute with ATM Ops Inc. d/b/a Bitstop is best understood as part of the broader unraveling of the Heller-linked ATM / crypto-kiosk ecosystem. Multiple creditor and investor groups are alleging that asset inventory, control, and cashflows have become contested, and that third-party operators may hold operational records needed to trace machines and proceeds.
Background: Who is Bitstop?
Bitstop is one of the oldest Bitcoin ATM operators in the United States, having operated since 2013. The company has grown to approximately 2,500 locations nationwide and is notable for several significant acquisitions:
- January 2023: Bitstop founders Andrew Barnard and Doug Carrillo acquired Genesis Coin, the world's largest Bitcoin ATM software platform (powering approximately 35% of global Bitcoin ATM transactions)
- July 2023: Genesis Coin acquired certain assets from CoinCloud following its Chapter 11 bankruptcy filing
These acquisitions made Bitstop/Genesis Coin a dominant force in the Bitcoin ATM industry, with an estimated market share of over 60% of all Bitcoin ATMs in North America.
The Heller/PowerCoin Enterprise
Key Fact: According to a document dated July 6, 2023, PowerCoin, LLC is controlled by Daryl Heller's Heller Capital Group. The agreement is executed by "PowerCoin, LLC" "By: Heller Capital Group, LLC, its Member," and signed by "Daryl F. Heller, CEO."
Corporate Overlap (from Court Filings)
Several documents tie PowerCoin and Bitstop to the same Heller-controlled cluster:
- A Heller-related operating agreement expressly describes Heller Capital Group ("HCG") and its affiliates as including "Powercoin" and "Bitstop" - conducting businesses involving "owning, operating, leasing and managing" digital currency kiosk machines and related platforms
- A filing that includes a Heller profile/statement describes Heller Capital's "primary holdings" in cryptocurrency to include both "Bitstop" and "Powercoin"
This corporate/affiliate overlap is important context for any lender enforcement action involving "PowerCoin kiosks" and a party operating under the "Bitstop" banner.
The "Heller Ponzi" Allegations
In parallel litigation, investor plaintiffs have alleged that Daryl Heller and Heller Capital "instituted a widescale fraudulent scheme" involving ATM and Bitcoin ATM units and investor funds.
Allegations from investor lawsuits include:
- Machines represented as purchased for investors either never existed, remained warehoused, were double-sold, or were not purchased outright
- Serial-number overlap and repeated double-selling across investor groups and funds
- ATMs were pledged as collateral for loans that later went into default, contributing to disputed ownership and enforcement actions by lenders
Important Note: Separate bankruptcy-court filings emphasize that whether any enterprise operated as a "Ponzi" scheme is ultimately a determination for the court - not a finding at the filing stage. These are allegations that have not been proven.
Chicago Atlantic vs. ATM Ops Inc. d/b/a Bitstop
Chicago Atlantic's posture in its dispute with Bitstop is consistent with the lender-enforcement pattern seen in the broader Heller unwind: a secured party or collateral agent attempting to trace and control a large pool of PowerCoin-linked kiosks and associated records/proceeds, while the operator/servicer (Bitstop) resists broad early discovery and disputes scope and process.
Pattern in Heller-Linked Disputes
A recurring operational theme in Heller-linked disputes: secured parties and creditors seeking court help to identify machine locations, seize kiosks, and capture cash in the machines. For example, in related federal cases, plaintiffs have sought orders:
- Determining they are entitled to immediate possession of digital currency kiosks and the cash in each kiosk
- Directing defendants to identify the location of each kiosk
- Appointing receivers to help repossess machines spread across jurisdictions
In the Heller context, this matters because serial numbers, locations, ownership chains, and cashflows are frequently the crux of disputes. When those records sit with an operator/servicer, litigation pressure tends to move quickly to discovery fights, injunction/receivership requests, and claims framed around control of machines and proceeds.
What to Watch
Key Issues Going Forward:
- Inventory proof and chain-of-title: Whether lenders can tie specific kiosks (by serial/ID and location) to enforceable collateral rights, especially amid allegations of double-selling and collateral pledges
- Operator record access: Whether courts compel operators/servicers to produce transaction logs, service history, cash/crypto flow records, and location lists - often the only practical path to enforcement in geographically distributed kiosk networks
- Spillover to host locations: Default language and removal/abandonment scenarios can accelerate asset movement and further complicate identification and priority disputes
Consumer Guidance
If you are considering using Bitstop Bitcoin ATMs, be aware that the company is named in litigation related to the Heller/PowerCoin enterprise. While Bitstop continues to operate its ATM network, the legal matters described here are ongoing.
The litigation primarily concerns corporate ownership, asset control, and investor claims - not direct consumer fraud allegations against Bitstop itself. However, consumers should:
- Monitor news about the operator before large transactions
- Keep records of all transactions including receipts
- Consider using operators with cleaner regulatory records for larger purchases