Bitcoin ATM startup sues former exec over botched El Salvador launch
Chicago’s largest Bitcoin ATM company has accused a former executive of sabotaging business relationships in El Salvador, reported Law360 last week.
Athena Bitcoin Global, which trades on over-the-counter markets, is now suing its former chief technology officer (CTO) Shaun Overton in Illinois court.
Overton was named CTO when Athena agreed to acquire Texas-based software company ROI Developers last year.
Overton was ROI Developers’ director and president at the time, back when the company conducted business under “Accruvia.”
Athena runs back-end systems for El Salvador’s state-sponsored Chivo ATMs. Last June, the company signed a contract to install 1,500 Bitcoin ATMs throughout the country.
The company’s stock surged nearly 1,200% in that month — from $0.13 to $1.90 — while it quickly began installing its first tranche of approximately 200 Bitcoin ATMs in El Salvador.
But the rollout turned sour from there. Athena alleges that Overton, ROI Developers, and Accruvia breached confidentiality agreements by disclosing software flaws in Athena’s ATMs.
Athena says Overton offered to fix the bugs only if El Salvador signed another contract with Accruvia.
Overall, the company claims that Overton’s actions prompted El Salvador to reduce its purchases of Athena’s Bitcoin ATMs.
Athena reckons Overton harmed its ability to hire the best possible personnel and comply with US anti-discriminatory hiring laws.
Overton allegedly sent an email to another executive in which he stated his refusal to work with “Indians.”
The company also claims its former CTO went out of his way to hire incompetent personnel, forcing Athena to fire them and incur various HR expenses.
Bitcoin ATMs won’t help El Salvador’s credit rating
El Salvador adopted Bitcoin as legal tender last year. First, a bill was passed in June which then became law in September.
Yet El Salvador is heavily indebted and it must repay its creditors with US dollars.
But the small Central American nation’s creditworthiness has deteriorated steadily since the announcement despite attempts to raise money with exotic Bitcoin bond offerings through Bitfinex.
- El Salvador’s sovereign creditworthiness was recently downgraded to “Junk” by ‘Big Three’ credit rating agency Fitch.
- The nation’s most important creditor, the International Monetary Fund (IMF), has repeatedly warned the country to undo its dual legal tender policy.
- The World Bank also objected to its adoption of Bitcoin as legal tender.
Throwing caution to the wind, El Salvador Finance Minister Alejandro Zelaya rejected IMF’s advice. President Nayib Bukele responded: “El Salvador DGAF,” short for “don’t give a fuck.”
Looking back, flaws in El Salvador’s Chivo wallet put a quick dampener on Bukele’s Bitcoin-related efforts. Residents reported many complaints and protested the adoption of Bitcoin, with activists destroying at least one Bitcoin ATM.
El Salvador relaunched the wallet with an AlphaPoint integration to resolve issues with local Bitcoin transfers. It also hired a new developer to resolve complaints of identity theft and missing funds.
El Salvador’s government has sponsored the installation of some 30 Bitcoin ATMs in the US; in Atlanta, Chicago, Houston, and Los Angeles for the El Salvadoran diaspora to use for remittances.
In 2019, over 2.3 million Salvadorans lived in the United States — roughly one-third of El Salvador’s 6.4 million population. International remittances famously made up 24% of El Salvador’s GDP last year.
Read more: [Will El Salvador default on its debt because of Bitcoin? Markets say yes]
As for Athena’s share price, markets promptly rejected the stock after Bukele and El Salvador tapered their orders.
Athena stock hit $33 at its peak last September, having surged more than 30,000% on its price at the start of 2021.
It now trades for just $2.19, down more than 90% from its September highs with no relief in sight. Still, it’s up nearly 2,000% over the past year, outperforming Bitcoin and Ether considerably.
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