BECKETT

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

STEVE BECKETT individually and on behalf of )

all others similarly situated, )

)

Plaintiff, )

)

v. ) Case No. 1:25-cv-01450-TWP-MG

)

BITCOIN DEPOT, INC., )

BITCOIN DEPOT OPERATING, LLC d/b/a )

BITCOIN DEPOT, )

)

Defendants. )

ORDER ON DEFENDANTS' MOTION TO COMPEL ARBITRATION

This matter is before the Court on a Motion to Compel Arbitration and Stay or Dismiss the

Action or in the Alternative to Dismiss and Strike Class Allegations (Filing No. 21) filed by

Defendants Bitcoin Depot, Inc., and Bitcoin Depot Operating, LLC d/b/a Bitcoin Depot (together,

"Bitcoin"). Plaintiff Steve Beckett ("Beckett") initiated this action on behalf of himself and all

others similarly situated against Bitcoin alleging causes of action for: Count I: Violation of Indiana

Deceptive Consumer Sales Act, Ind. Code §§ 24-5-0.5-4(a) and (i); Count II: Replevin; Count III:

Negligence/Gross Negligence/Recklessness; and Count IV: Voluntary Assumption of a Duty

(Filing No. 1). Oral argument on the Motion was heard on December 16, 2025. For the reasons

explained in this Order, the Court grants the Motion to Compel Arbitration and to stay this action;

and denies the alternative requests to dismiss and strike class allegations.

I. BACKGROUND

On December 16, 2024, Beckett, a 66-year-old retired professional, received a fraudulent

computer message claiming that his screen was locked and directing him to call Microsoft for

assistance (Filing No. 1 at 18). Beckett followed the instructions, contacted the provided number,

and spoke with an individual claiming to be a representative from Microsoft. Id. This individual is

now understood to have been a scammer.

Beckett granted the scammer remote access to his computer believing he was receiving

legitimate technical support. Id. The scammer told Beckett that his computer and accounts had

been compromised to purchase illegal pornography, including child pornography, and to make

unauthorized purchases with multiple credit and debit cards. Id. at 19. The scammer convinced

Beckett that law enforcement was involved and that his financial accounts were at risk. Id. Beckett

was instructed to withdraw cash and deposit it into Bitcoin ATMs to "secure" his funds and resolve

the alleged criminal activity. Id.

That same day, Beckett withdrew $4,000.00 from his bank at 2:20 p.m., and deposited

$1,000.00 into a Bitcoin ATM. Fifteen minutes later, at 2:35 p.m., Beckett deposited another

$3,000.00 into the same Bitcoin ATM. Id.

The next day, December 17, 2024, Beckett withdrew an additional $3,100.00 from his bank

account and returned to the same Bitcoin ATM, depositing $3,000.00 at 2:35 p.m. Id. at 20. After

this third transaction, Beckett noticed the fraud warnings associated with his Bitcoin ATM usage,

and he started to question whether something might be wrong with the situation. Id. When the

scammer instructed him to empty out his IRA accounts for an additional deposit, Beckett's

suspicions were heightened. He discussed the situation with his wife. Id.

Prior to completing each of the transactions, Beckett had to agree to Bitcoin's Terms and

Conditions ("Terms and Conditions" or "Agreement"), which provide:

The parties hereby agree to arbitrate all claims that may arise under the Agreement.

Without limiting the foregoing, should a dispute arise between the parties

(including the Covered Parties) including, without limitation, any matter

concerning the Bitcoin Depot Offerings, the terms and conditions of the Agreement

or the breach of the same by any party hereto: (a) the parties agree to submit for

resolution by arbitration before the American Arbitration Association ("AAA") in

Atlanta, GA, in accordance with the current Commercial Arbitration rules of the

AAA.

(Filing No. 24-1 at 19–20 ¶ 17.1). The Terms and Conditions also provide:

THE AGREEMENT CONTAINS DISCLAIMERS OF WARRANTIES,

LIMITATIONS OF LIABILITY, RELEASES, A CLASS-ACTION WAIVER,

AND THE REQUIREMENT TO ARBITRATE ANY AND ALL CLAIMS THAT

MAY ARISE HEREUNDER AGAINST BITCOIN DEPOT, AS WELL AS ITS

PARENT, SUBSIDIARIES, RELATED PARTIES, THIRD-PARTY SERVICE

PROVIDERS AND MARKETING PARTNERS (COLLECTIVELY, "COVERED

PARTIES"), WHO ARE EXPRESS THIRD-PARTY BENEFICIARIES OF THE

MANDATORY ARBITRATION PROVISION. THE AFOREMENTIONED

PROVISIONS ARE AN ESSENTIAL BASIS OF THE AGREEMENT.

Id. at 2.

To engage in each transaction, Beckett had to verify his telephone number through the

Bitcoin ATM with the screen, which states in red text, "If someone else sent you to this machine

and provided you with a QR Code or wallet ID to send funds to, it is most likely a scam." (Filing

No. 24-4 at 4). Beckett was then asked to create and verify a secret PIN. Id. at 5.

Beckett was then sent a text message, which read, "Warning! Don't use Depot's ATM for

payments to any govt [sic] entities, law enforcement, employers, tech support companies, and

significant others, as it's likely a scam. Don't use a QR code provided by a 3rd party. Need help?

Call 678-435-9604." Id. With each transaction, Beckett had to enter his identifying information.

Next, before any transaction could be completed, another screen popped up, which

included a warning:

ARE YOU BEING SCAMMED? Do not buy bitcoin for IRS payments, if someone

says you have been hacked or are being investigated, or if someone is trying to

access your computer or bank account. These are scams!

WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL

TRANSACTIONS MAY NOT BE RECOVERABLE AND TRANSACTIONS IN

VIRTUAL CURRENCY ARE IRREVERSIBLE.

Id. at 11. Beckett accepted the Terms and Conditions and proceeded past the above warning screens

for each of the three transactions.

In addition, to complete a transaction, a user must scan a QR code that contains a link to a

Bitcoin wallet. The user is then given another prompt stating: "Does this wallet belong to you?"

There are two options provided: "No, it's someone else's"; and "Yes, it's mine." Id. at 12. If the user

selects "No, it's someone else's," then the user is directed to a prompt that states "WARNING" in

red letters and:

Bitcoin Depot terms of service require all users to use Bitcoin wallets that they own.

You selected that you do not own the wallet you are attempting to use.

Never scan a QR code that has been provided to you from a 3rd party. Remember

Bitcoin transactions are final and irreversible. QR codes provided to you by

government entities including the IRS, law enforcement, employers, technical

support companies, someone saying you've been hacked and significant other could

be scams.

Please contact Bitcoin Depot customer support if you have questions about scams:

(678) 435-9604.

In order to proceed you will need to create your own Bitcoin wallet and provide the

Bitcoin wallet address QR code from that wallet.

Id. If the user says they are using someone else's wallet, the transaction is cancelled, and they must

start over and download their own wallet. Id. During the three transactions, Beckett confirmed that

the Bitcoin wallet to which he was transferring the Bitcoin was his own (Filing No. 23 at 5).

After Beckett discussed the matter with his wife, they went to the Bitcoin ATM, examined

it, and called Bitcoin's customer service to report the suspected fraud (Filing No. 1 at 20). The

Bitcoin representative confirmed that it was likely fraud and told Beckett that there was no way to

get his money back. Id.

All transactions facilitated via Bitcoin ATMs come with a service fee, which in this case

totaled approximately $2,000.00. Id. Beckett filed a police report and contacted Bitcoin seeking

assistance and recovery of the funds. Id. at 21. However, Bitcoin retained possession of the

approximately $2,000.00, stating that transactions are irreversible.

On July 21, 2025, Beckett filed this action (Filing No. 1).

II. LEGAL STANDARD

In 1925, Congress enacted the Federal Arbitration Act ("FAA") in response to "widespread

judicial hostility to arbitration." Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228, 232 (2013).

Section 2 of the FAA provides:

A written provision in any . . . contract evidencing a transaction involving

commerce to settle by arbitration a controversy thereafter arising out of such

contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon

such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. Thus, arbitration is a matter of contract. Am. Exp., 570 U.S. at 233. Consistent with

this principle, courts must place arbitration agreements "on an equal footing with other contracts

and enforce them according to their terms." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339

(2011) (citation omitted).

A party seeking to compel arbitration must show (1) a valid agreement to arbitrate, (2) the

dispute is within the scope of arbitration, and (3) the opposing party refuses to proceed to

arbitration. Kass v. PayPal Inc., 75 F.4th 693, 700 (7th Cir. 2023). Arbitration can only be

compelled when the court is "satisfied that the parties agreed to arbitrate that dispute." Granite

Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 297 (2010) (emphasis in original); United Nat.

Foods, Inc. v. Teamsters Loc. 414, 58 F.4th 927, 933 (7th Cir. 2023). Whether a valid arbitration

agreement exists is a matter of state contract law. Tinder v. Pinkerton Sec., 305 F.3d 728, 733 (7th

Cir. 2002).

"One way to assent to and form a contract online is for a customer to click on an 'I Accept'

button as part of a 'clickwrap' agreement. Courts around the country have recognized that this type

of electronic 'click' can suffice to signify the acceptance of a contract." Domer v. Menard, Inc., 116

F.4th 686, 694 (7th Cir. 2024) (citations and internal quotation marks omitted). A court may

consider challenges to the arbitration clause itself, but any challenge to the contract as a whole

should only be resolved by an arbitrator. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440,

445−46 (2006) ("[U]nless the challenge is to the arbitration clause itself, the issue of the contract's

validity is considered by the arbitrator in the first instance.").

If the moving party establishes that there is a valid arbitration agreement, the FAA provides

a strong presumption that arbitration "should not be denied unless it may be said with positive

assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted

dispute." AT&T Techs., Inc. v. Commc'n Workers of Am., 475 U.S. 643, 650 (1986) (internal

quotations omitted). Any doubt concerning the arbitration "should be resolved in favor of

coverage." Id. This presumption is especially applicable when the arbitration clause is broad. See

id. Only the "most forceful evidence" to exclude a claim from arbitration will prevail. Id.

A motion to compel arbitration is decided according to the standard used to resolve

summary judgment motions pursuant to Federal Rule of Civil Procedure 56. Tinder, 305 F.3d at

735. "Just as in summary judgment proceedings, a party cannot avoid compelled arbitration by

generally denying the facts upon which the right to arbitration rests; the party must identify specific

evidence in the record demonstrating a material factual dispute for trial." Id. (citing Oppenheimer

& Co., Inc. v. Neidhardt, 56 F.3d 352, 358 (2d Cir. 1995)).

III. DISCUSSION

Bitcoin argues that all three elements necessary to compel arbitration under the FAA are

met (Filing No. 22 at 9). Beckett argues that before addressing the merits of any arbitration clause,

the Court must first determine whether Bitcoin's Terms and Conditions "clearly and unmistakably"

delegate questions of arbitrability to an arbitrator (Filing No. 26 at 8). He also contends the

arbitration clause is unenforceable due to unconscionability. Id. The Court will first address

whether the three elements necessary to compel arbitration exist, before turning to Beckett's

contentions.

Bitcoin argues the first prong is satisfied because there is a written agreement to arbitrate,

which is all that is necessary for the first prong. Id. (citing Zurich Am. Ins. Co. v. Watts Indus., Inc.,

417 F.3d 682, 690 (7th Cir. 2005)). The Court agrees. The first prong is satisfied because there is

a written agreement to arbitrate assented to by both parties. See Zurich, 417 F.3d at 690. Beckett

does not contest that he assented to the arbitration agreement on three separate occasions when he

agreed to Bitcoin's Terms and Conditions, which provide that the parties agree to arbitrate all

claims which may arise under the agreement (Filing No. 24-1 at 19–20 ¶ 17.1). He clearly did on

three separate occasions.

Concerning the second prong, Bitcoin argues that Beckett's claims fall squarely within the

arbitration provision because the Terms and Conditions expressly state that "[t]he parties hereby

agree to arbitrate all claims that may arise under the Agreement." Id. at 19–20. Bitcoin points out

that the Seventh Circuit has held that "any dispute between contracting parties that is in any way

connected with their contract could be said to 'arise out of' their agreement and thus be subject to

arbitration under a provision employing this language." (Filing No. 22 at 9 (quoting Sweet Dreams

Unlimited, Inc. v. Dial-A-Mattress Int'l, Ltd., 1 F.3d 639, 642 (7th Cir. 1993))).

Bitcoin also cites to Mooneyham v. Bitcoin Depot, Inc., a District of South Carolina case

dealing with the same arbitration provision in a similar factual circumstance. Id. at 10 (citing

Mooneyham v. Bitcoin Depot, Inc., No. 24-cv-01774, 2025 U.S. Dist. LEXIS 35477 (D.S.C. Feb.

27, 2025)). Mooneyham, a 73-year-old woman, was the target and victim of a cryptocurrency ATM

scam. Imposters claiming to be her bank and the Federal Trade Commission called her and

instructed her to withdraw money from her bank account and deposit it into a Bitcoin Depot ATM

to protect her money. Upon initiating transactions with the ATM, the machine displayed numerous

informational prompts to the user, requiring the user to read and accept the prompts to complete a

transaction at the ATM. To continue her transactions while using the ATM on two occasions,

Mooneyham selected "I accept these terms and conditions," which included mandatory arbitration.

Mooneyham argued that she was incapable of exercising free will to voluntarily assent because

she was under duress as an elderly consumer. The district court found that all claims asserted in

Mooneyham's putative class action fell within the scope of the broad arbitration provision, and

rejected her arguments regarding contract formation and duress, holding that such defenses must

be decided by the arbitrator. Id. at *4–5. Bitcoin argues that Mooneyham provides persuasive,

recent authority that supports compelling arbitration and staying or dismissing this action.

Although Mooneyham is not binding, the Court agrees that it is persuasive in determining

that the dispute here is within the scope of arbitration. Beckett's claims—Violation of Indiana

Deceptive Consumer Sales Act, Replevin, Negligence/Gross Negligence/Recklessness, and

Voluntary Assumption of a Duty—clearly arise out of the agreement, as each of these claims

surround the transactions that took place, and the arbitration agreement specifically uses the phrase

"all claims that may arise under" the arbitration agreement to determine the scope.

Finally, Bitcoin argues that the third prong—that Beckett refuses to proceed to

arbitration—is clearly satisfied because "a plaintiff refuses to proceed to arbitration where they

(1) have filed a lawsuit and (2) opposed the defendant's motion to compel arbitration." (Filing No.

22 at 11 (citing Extremely Clean Cleaning Servs., LLC v. CAAT, Inc., No. 18-cv-02968, 2019 U.S.

Dist. LEXIS 30149, at *7 (S.D. Ind. Feb. 25, 2019) ("Plaintiffs have demonstrated their refusal to

submit to arbitration by filing this lawsuit and by their opposition to [d]efendants' motions to

stay."))). Here, Beckett has refused to submit to arbitration by filing this lawsuit and opposing the

instant motion.

Accordingly, the Court concludes that all three elements required for compelling arbitration

have been met, and unless the Court is persuaded by Beckett's contentions that he should not be

compelled to arbitrate on other grounds, the Court will enforce the arbitration agreement contained

in the Terms and Conditions.

Beckett argues that the Court should not compel arbitration for two reasons: (1) the Court,

not an arbitrator, must decide the validity of the purported arbitration agreement because the Terms

and Conditions language does not "clearly and unmistakably" delegate questions of arbitration to

the arbitrator; and (2) the arbitration clause is unenforceable due to unconscionability (Filing No.

26 at 6–11).

A. Delegation of Arbitrability

Beckett argues that the Terms and Conditions do not contain an express delegation clause

and merely state that "the parties hereby agree to arbitrate all claims that may arise under the

Agreement." Id. at 7. However, the Agreement also states that disputes will be submitted "for

resolution by arbitration before the American Arbitration Association ('AAA') in Atlanta, GA, in

accordance with the then current Commercial Arbitration rules of the AAA." Id.

Beckett acknowledges that the Terms and Conditions reference the AAA Commercial

Rules—which provide that arbitrators may rule on their own jurisdiction—but argues that courts

are divided on whether mere incorporation of AAA rules constitutes "clear and unmistakable"

delegation, particularly in consumer contracts of adhesion. Id. (citing Ajamian v. CantorCO2e,

L.P., 137 Cal. Rptr. 3d 773, 789 (Cal. Ct. App. 2012) (holding incorporation of the AAA rules

insufficient for unsophisticated parties absent specific delegation language)).

Here, it is undisputed that the arbitration clause incorporated the AAA Commercial

Arbitration rules. See Dunston v. R. G. Love Galleries, Inc., No. 07 CV 5113, 2008 U.S. Dist.

LEXIS 44118, at *8 (N.D. Ill. June 4, 2008) ("[W]here the parties agree to arbitration pursuant to

the rules of the [AAA], the parties incorporate the AAA's rules into the arbitration agreement.").

Rule 7(a) of the AAA Commercial Arbitration rules explicitly grants to the arbitrator "the power

to rule on his or her jurisdiction." Gilman v. Walters, 61 F. Supp. 3d 794, 800 (S.D. Ind. 2014).

Many district courts within the Seventh Circuit and sister circuit courts have held that by

incorporating the AAA rules into their agreements, parties evidence a "clear and unmistakable"

intent to allow the arbitrator to decide the question of arbitrability. See id. (citing cases).

The Court understands Beckett's argument—that, as the California state court held in

Ajamian, unsophisticated individuals are unlikely to understand that the incorporation of the AAA

rules means an arbitrator will determine arbitrability rather than the courts, 137 Cal. Rptr. 3d at

789—however, the majority of courts have reached the opposite conclusion. See Gilman, 61 F.

Supp. 3d at 801 n.4.

Moreover, while there may be an instance where a plaintiff is so unsophisticated and so

unaware of the ramifications of assenting to a set of terms and conditions as to warrant the

invalidation of a delegation clause, but that does not appear to be the case here. Beckett was a 66-

year-old, lifelong professional who went back to the Bitcoin ATM on multiple occasions, assented

to the Terms and Conditions three separate times to complete three separate transactions, was

specifically warned via the ATM screen and text that this was likely a scam, and then misstated

that the funds were being transferred to his wallet on three different occasions when that was never

the case.

Regardless, Beckett's contention that the Terms and Conditions do not contain an express

delegation clause fails, so the Court will now address his unconscionability contention.

B. Unconscionability

Beckett challenges the substantive and procedural unconscionability of the Terms and

Conditions. On Reply, Bitcoin argues the unconscionability of the Terms and Conditions should

be decided by the arbitrator rather than the Court (Filing No. 27 at 7). Bitcoin argues that Beckett's

unconscionability challenge is to the Agreement as a whole rather than solely the agreement to

arbitrate and thus, pursuant to Supreme Court precedent, this issue must be determined by the

arbitrator. The Court agrees.

Under Section 2 of the FAA, a party may challenge the validity of an agreement in two

ways: first, he may specifically challenge the enforceability of the arbitration clause itself; and

second, he may challenge the enforceability of the contract as a whole. Buckeye, 546 U.S. at 444;

Mooneyham, 2025 U.S. Dist. LEXIS 35477, at *12. The former challenge is for the court to decide,

whereas the latter is for the arbitrator to decide. See Rent-A-Center, West, Inc. v. Jackson, 561 U.S.

63, 70–72 (2010); Buckeye, 546 U.S. at 444.

Here, Beckett's challenge falls under the latter—a challenge that the entire contract is

unconscionable. Beckett specifically argues that "[t]he arbitration agreement and related terms are

unconscionable and unenforceable under Indiana law." (Filing No. 26 at 11). Beckett's substantive

challenge argues that:

Bitcoin Depot's Terms [and Conditions] create an unconscionable system that

immunizes the company from liability while ensuring it profits from every

transaction—including those it knows are fraudulent. Compl. ¶¶ 24, 81, 89–98. The

agreement requires individual arbitration in Atlanta, Georgia, bars class actions,

and limits Bitcoin Depot's liability to "THE FEES PAID BY YOU TO BITCOIN

DEPOT (IF ANY) DURING THE SIX (6) MONTHS IMMEDIATELY

PRECEDING THE DATE OF ANY CLAIM." See Brown Decl. 6(a)–(b), Ex. E. In

practical terms, this means Bitcoin Depot's maximum liability for facilitating a

$7,000 scam is the $2,000 in fees it retained from that very transaction.

Id. at 9. Beckett goes on to challenge the fee retention clauses, the right to amend, and the artificial

statute of limitations contained in the Terms and Conditions. Id. His substantive challenge

concludes by stating, "The cumulative effect contravenes fundamental public policy by allowing

a party to contract away liability." Id. at 10.

Beckett's procedural unconscionability challenge contends that the Terms and Conditions

as a whole are presented as a "take-it-or-leave-it" proposition with no opportunity for negotiation

or meaningful review, are displayed on a small ATM screen in dense legalese with critical

provisions—including the arbitration clause, class action waiver, liability limitations, and non-

refundable fee terms—buried within lengthy text, and fail to provide any plain-language

explanation of their most consequential provisions. Id.

Bitcoin is correct. Beckett's unconscionability challenge concerns the Terms and

Conditions as a whole, rather than the arbitration clause itself, requiring an arbitrator to determine

this issue. See Buckeye, 546 U.S. at 444; see also Rent-A-Center, 561 U.S. at 70–72; Mooneyham,

2025 U.S. Dist. LEXIS 35477, at *12. Given the strong federal policy favoring arbitration, "the

party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for

arbitration." Green Tree Fin. Corp.-Ala. n. Randolph, 531 U.S. 79, 91 (2000). Beckett has failed

to do so. Accordingly, Bitcoin's Motion to Compel Arbitration is granted.

Bitcoin has also requested a stay of the action pending arbitration. The FAA requires a court

to stay "any suit or proceeding" pending arbitration of "any issue referable to arbitration under an

agreement in writing for such arbitration." 9 U.S.C. § 3. Specifically, Section 3 of the FAA provides

that “upon being satisfied that the issue involved in such suit or proceeding is referable to

arbitration," the Court "shall on application of one of the parties stay the trial of the action until

such arbitration has been had in accordance with the terms of the agreement." /d.; see also Halim

v. Great Gatsby's Auction Gallery, Inc., 516 F.3d 557, 561 (7th Cir. 2008) ("[T]he proper course

of action when a party seeks to invoke an arbitration clause 1s to stay the proceedings rather than

to dismiss outright."). Accordingly, having determined that the three elements necessary for the

Court to compel arbitration have been met, and that it is for the arbitrator to determine the

arbitrability and unconscionability of the Terms and Conditions, the Court grants Bitcoin's request

to stay this action. Having determined that the Motion to Compel should be granted, and this action

stayed, the Court denies the alternative requests to "outright" dismiss this action.

IV. CONCLUSION

For the reasons discussed above, Bitcoin's Motion to Compel Arbitration and Stay or

Dismiss the Action or in the Alternative to Dismiss and Strike Class Allegations (Filing No. 21) ts

GRANTED in part and DENIED in part. The Motion is granted in that Beckett is ORDERED

to arbitrate his claims as provided by the Agreement, and this proceeding is STAYED pending the

completion of arbitration.

The Motions for this Court to Dismiss and Strike Class Allegations are denied without

prejudice, as these issues should be resolved by the arbitrator. The parties ace ORDERED to file

a joint report on the status of the arbitration proceedings by April 30, 2026.

SO ORDERED.

Date: __2/26/2026 a Wathe licith

United States District Court

Southern District of Indiana

13

Distribution:

Marc E. Dann

Dann Law Firm

mdann@dannlaw.com

Brian Daniel Flick

DannLaw

bflick@dannlaw.com

Marita Isabel Ramirez

Dann Law Firm

mramirez@dannlaw.com

Jena M. Valdetero

Greenberg Traurig LLP

jena.valdetero@gtlaw.com