Genesis Coin Sues Coin Cloud Over Failed IP Sale — $1.5M Note at Stake, But No Assets Ever Delivered
2026-02-12|Bitcoin ATM News
At a Glance
$1.5M promissory note in dispute — Genesis Coin signed the note to purchase Coin Cloud's IP but argues payment was never triggered because assets were never delivered
34 account logins and 30+ domains never transferred — GitHub repos, AWS, Google Workspace, social media, and domain names remained in Coin Cloud's control from July 2023 through October 2025
$150,000 escrow deposit at stake — Genesis Coin seeks return of the deposit plus damages
300,000 customer records breached — hackers stole Coin Cloud's backend source code, 70,000 customer selfies, and SSNs in a breach disclosed November 2023
Competitor PowerCoin given access first — Coin Cloud allegedly provided a direct competitor with GitHub and email access before Genesis Coin received its purchased assets
Filed October 17, 2025 in Nevada Bankruptcy Court — 7 counts including breach of purchase agreement, unjust enrichment, and declaratory judgment (Case 23-10423-mkn)
# Genesis Coin Sues Coin Cloud Over Failed IP Sale — $1.5M Note at Stake, But No Assets Ever Delivered
Genesis Coin isn't paying the $1.5 million promissory note it signed to buy Coin Cloud's intellectual property — and it's asking the bankruptcy court to declare it doesn't have to. In a complaint filed October 17, 2025, the Bitcoin ATM manufacturer alleges Coin Cloud materially breached their asset purchase agreement by failing to deliver the assets, letting third parties access the source code, and suffering a data breach that exposed the very IP Genesis Coin had purchased.
The case is unusual: not a typical payment dispute, but a fight over whether a condition precedent was ever satisfied. Genesis Coin argues it bought IP that became worthless before it was ever transferred. Coin Cloud's assignee, Genesis Global Holdco (a creditor unrelated to Genesis Coin despite the name), is now trying to enforce the note — and confess judgment — based on a "deemed complete" provision in the contract. Genesis Coin is arguing that language set a deadline, not an excuse for non-performance.
Core Allegations:
Assets never transferred: Coin Cloud failed to deliver login credentials, domain names, and source code repositories despite repeated requests from July 2023 through October 2025.
Third-party access: Coin Cloud gave competitors (PowerCoin) and subcontractors access to Genesis Coin's purchased GitHub repos, email servers, and location data before and after the closing date.
Data breach: Hackers stole Coin Cloud's backend source code and data on 300,000 customers (including 70,000 selfies and SSNs) — the very assets Genesis Coin had purchased. The breach became public in November 2023, four months after closing.
Payment obligation never triggered: Genesis Coin argues Section 7.02(b) of the purchase agreement made payment contingent on Coin Cloud completing the "Asset Transition" — which never happened.
## The Deal: $1.5M for IP That Was Never Delivered
On June 28, 2023, Genesis Coin agreed to purchase all of Coin Cloud's intellectual property assets — source code, trademarks, domain names, customer databases, GitHub repositories, AWS accounts, social media handles — for a $1.5 million promissory note plus 1% of net proceeds from specified machines over the following 12 months. Genesis Coin paid a $150,000 deposit into escrow. The bankruptcy court approved the sale on June 30, 2023, and the transaction closed on July 14, 2023.
The purchase agreement required Coin Cloud to "immediately transfer" all purchased assets, including login credentials to 34 enumerated accounts (GitHub, AWS, Google Admin, social media, domain registrars). If immediate transfer wasn't possible, Coin Cloud had 60 days to complete the "Asset Transition" — a multi-step process defined in Schedule I of the agreement.
Case: Genesis Coin, Inc. v. Cash Cloud, Inc. and Genesis Global Holdco, LLC
Court: U.S. Bankruptcy Court, District of Nevada
Adversary No.: (not yet assigned at filing)
Chapter 11 Case: 23-10423-mkn
Filed: October 17, 2025
## What Genesis Coin Says It Never Got
34
Account logins Coin Cloud failed to deliver
30+
Domain names not transferred
According to the complaint, Coin Cloud never delivered:
- **GitHub account access** (containing the entire source code for Coin Cloud's kiosk operating system and mobile wallet app)
- **Google Workspace admin credentials** (email servers, shared drives)
- **AWS account access** (cloud infrastructure hosting the backend)
- **Social media accounts** (Twitter, Instagram, TikTok, LinkedIn, Facebook, YouTube)
- **30+ domain names** (including coincloud.co, coincloudatm.com, buybitcoin.io)
- **Customer data records** (email addresses, phone numbers for the CRM)
- **DNS and domain management accounts**
In an email dated July 11, 2023 — three days before closing — Coin Cloud's VP of People, Stephanie Baldi, told Genesis Coin's team: "To ensure we preserve what is needed for the estate we have been instructed we cannot give google suite access (email/shared drives) at this time."
Over two years later, Genesis Coin alleges, those credentials were never provided.
## Coin Cloud Gave Competitor PowerCoin Access to the Assets Before Genesis Coin
Genesis Coin alleges Coin Cloud permitted third parties — including PowerCoin, a direct competitor of Genesis Coin — to access the purchased assets both before and after closing.
In a July 11, 2023 email (pre-closing), Genesis Coin's Chief Development Officer Jorge Fernandez wrote to Coin Cloud's advisors:
"It has come to our attention that PowerCoin was given access to GitHub and was even provided with CoinCloud email addresses even before us. The information contained in GitHub as well as access to CC email servers was specifically purchased by Genesis Coin. First of all, we have been asking for weeks for access to GitHub and we just recently had the call to give us access yesterday. Only to find out that the PC has been given access to the account prior to us, without our authorization."
- Jorge Fernandez, Genesis Coin CDO, July 11, 2023
Six days later, after closing, Genesis Coin's CEO Andrew Barnard warned Coin Cloud: "As of today, we have closed on our part of the agreement. This means that access to any of the platforms that PowerCoin is requesting access to has to be addressed directly with Genesis Coin... This is a liability issue for your side with no reward as far as I can tell."
The complaint alleges Coin Cloud entered into a services agreement with PowerCoin on July 21, 2023 — a week after closing — under which PowerCoin would perform cash collection services from the kiosks. Genesis Coin argues this gave PowerCoin continued access to systems it had purchased.
## The Data Breach: 70,000 Customer Selfies and 300,000 SSNs Stolen
In November 2023 — four months after closing — public reports revealed that hackers had stolen Coin Cloud's backend source code and customer data. The complaint cites articles from *The Block* and *Cointelegraph* stating that an unidentified hacking group obtained:
- Coin Cloud's backend source code
- 70,000 customer selfie verification images
- Sensitive personal data for 300,000 customers (Social Security numbers, occupations, physical addresses, phone numbers)
Genesis Coin alleges this breach occurred before the sale but was never disclosed. The complaint argues the breach "rendered [the source code] worthless by destroying its confidentiality" and "exposes Genesis Coin to massive reputational and potential legal liabilities as a purported successor to the compromised data."
The purchase agreement required Coin Cloud to be "responsible for the security or privacy of any of the Purchased Assets for periods prior to Closing (including protection of any credentials for any account, Database... or otherwise)."
## The Legal Question: What Does "Deemed Complete" Mean?
The heart of the case is a contract interpretation dispute over one sentence in Section 7.02(b) of the purchase agreement:
> "Buyer's obligations under Section 2.03 herein shall be subject to Seller's completion of the Asset Transition, and Buyer shall only be obligated to commence paying the Purchase Price under this Agreement, the Note, and the Guaranty on the thirtieth (30th) day following the Purchased Assets Delivery Date."
The definition of "Asset Transition" includes this language: "For the avoidance of doubt, regardless of the status of any of the foregoing, the Asset Transition shall be **deemed to be completed** no later than the date that is sixty (60) days after Closing."
Genesis Global (which Coin Cloud assigned the promissory note to in April 2025) argues this "deemed complete" language means Genesis Coin's payment obligation triggered automatically 60 days after closing — regardless of whether Coin Cloud actually delivered the assets.
Genesis Coin argues that reading the contract as a whole, the "deemed complete" language set a deadline for performance, not a get-out-of-performance-free card. The complaint points to Section 7.02(b)'s explicit statement that payment is "subject to Seller's completion of the Asset Transition" — which never happened.
Genesis Coin also argues the "Excess Payment" (1% of machine proceeds above $1.5M) made no sense unless the Asset Transition actually occurred — because Genesis Coin would be paying for performance it never received.
## The Confession of Judgment: Genesis Global Wants to Skip Court
On May 6, 2025, Genesis Global moved in bankruptcy court for permission to file a confession of judgment against Genesis Coin and its guarantor, Kiosk Service Solutions, LLC. The promissory note includes a provision allowing Genesis Global to confess judgment "upon the occurrence of any Event of Default" — and Genesis Global claims an Event of Default occurred because payment wasn't made on the deadline.
Genesis Coin alleges this is improper because the payment obligation never arose: Coin Cloud didn't deliver the assets, so the condition precedent was never satisfied. The complaint argues Genesis Global "cannot acquire rights that Debtor [Coin Cloud] did not have."
Genesis Global is an unrelated entity to Genesis Coin despite the shared use of "Genesis" in the name. The complaint includes a footnote clarifying they are "entirely separate and unaffiliated entities."
## What Genesis Coin Is Asking For
Genesis Coin's Claims
I
Breach of Purchase Agreement
Coin Cloud failed to deliver the Purchased Assets as required.
II
Breach of IP Assignment Agreement
Coin Cloud failed to assign the Intellectual Property Assets.
III
Breach of Domain Name Assignment
Coin Cloud failed to transfer the domain names.
IV
Unjust Enrichment (Alternative)
Coin Cloud accepted the $150,000 deposit but never delivered the assets.
V
Promissory Estoppel (Alternative)
Genesis Coin relied on Coin Cloud's promise to transfer assets.
VI
Breach of Implied Covenant of Good Faith and Fair Dealing
Coin Cloud and Genesis Global acted in bad faith by demanding payment without performance.
VII
Declaratory Judgment
Genesis Coin's payment obligations were never triggered and it is entitled to return of the $150,000 deposit.
Genesis Coin is asking the court to:
1. Return the $150,000 deposit, plus interest, fees, and costs
2. Declare that Genesis Coin's payment obligations never arose because the condition precedent was not satisfied
3. Declare that any lien Genesis Global holds over the deposit is invalid
4. Award damages in an amount to be proven at trial, but at least $150,000
5. Award attorney's fees and costs
## What Happens Next
This case will turn on contract interpretation. Did the "deemed complete" language in the Asset Transition definition mean Coin Cloud could fail to deliver the assets and still demand payment? Or was actual delivery a condition precedent, with the "deemed complete" language simply setting a deadline?
Genesis Coin sent three demand letters to Coin Cloud and Genesis Global between November 2023 and March 2025. None were answered except with Genesis Global's January 2024 letter asserting the note was in default.
The bankruptcy court approved the original sale in June 2023 and found Genesis Coin to be a "good faith" purchaser under Section 363(m) of the Bankruptcy Code. The sale order reserved jurisdiction "to adjudicate, if necessary, any and all disputes concerning or relating in any way to the Sales."
The case also raises a question about Genesis Global's assignment. Coin Cloud assigned its rights under the promissory note to Genesis Global on April 23, 2025. But under Nevada law (which governs the contract), an assignee takes subject to all defenses the debtor had against the assignor. If Genesis Coin's breach-of-contract and failure-of-consideration defenses are valid, Genesis Global has no more right to payment than Coin Cloud did.
What Genesis Coin is really asking for is a ruling that when you sell IP, you have to actually deliver the IP — and if you don't, you can't enforce the buyer's payment obligation by pointing to a deadline provision. Whether the bankruptcy court agrees will determine whether Genesis Coin owes $1.5 million for source code it never received.
**Related:**
- Coin Cloud files Chapter 11 bankruptcy
- Consumer protection resources
- Bitcoin ATM operator directory
**Disclaimer:** This article is for informational purposes only and does not constitute legal advice. Consumers and operators should consult qualified legal counsel for advice specific to their situation.
This article is based on publicly available legal filings and regulatory documents.
It does not constitute legal advice. All parties referenced are presumed innocent until proven otherwise.
