Lawsuit Accuses Bitbox of Deceptive Practices in $100K Crypto ATM Franchise Deal
On Monday, April 1, 2024, Braeden Thorup filed a complaint in the US District Court for the District of Utah against Bitbox International, Inc. alleging fraudulent inducement and multiple breaches of contract relating to Thorup’s investment in Bitbox’s bitcoin ATM franchise opportunity.
According to the complaint, Thorup is a resident of Utah who was introduced to Bitbox’s investment opportunity by a broker in June 2022. Bitbox’s National Sales Director Joel Carlsen then contacted Thorup directly to describe the franchise opportunity, which involved investing over $100,000 to receive four bitcoin ATMs, software, installation, and ongoing services from Bitbox.
Over the next few months, Carlsen sent Thorup a presentation, disclosure document, and earnings report promoting the opportunity. The documents claimed investors would need little involvement beyond collecting monthly profits from the ATMs. Bitbox also allegedly promised to handle all regulatory compliance, fund the ATMs with cryptocurrency, and maintain exclusive control over the machines.
Relying on these representations, Thorup entered into an investment contract with Bitbox on September 28, 2022, to receive the bitcoin ATM package for $104,799. However, the complaint states all four ATMs delivered in December had defects and went offline repeatedly over the next several months. When Thorup notified Bitbox of issues, the company allegedly refused to provide repairs or maintenance as promised in the contract’s warranty.
In a further purported breach, Bitbox sent Thorup an email in July 2023 attempting to alter the material terms of the agreement. The email supposedly shifted responsibilities like funding the ATMs and ongoing compliance from Bitbox to Thorup, contradicting prior assurances. Thorup claims he has attempted unsuccessfully to contact Bitbox about performing their obligations under the original contract.
The complaint alleges Bitbox knew the machines were defective and incapable of sustaining the promoted earnings when marketing the opportunity to Thorup. It accuses the company of fraudulent inducement through misrepresentations about the investment returns, Bitbox’s regulatory abilities, and the extent of services they would provide. Thorup is seeking rescission of the contract and damages of at least $104,799 for Bitbox’s alleged breaches.
In addition to breach of contract, the complaint charges Bitbox with violating the implied covenant of good faith, breaching express warranties, negligent misrepresentation, Utah’s Consumer Sales Practices Act, and Business Opportunity Disclosure Act. As a franchisor operating in Utah, Bitbox purportedly failed to comply with state registration requirements before selling the bitcoin ATM program.
Please contact BlockTribune for access to a copy of this filing.
