Federal Trade Commission slams Butterfly Labs for $39M [tl;dr: they'll never pay up]

[ThunderRd]

US bitcoin mining hardware manufacturer Butterfly Labs finally gets judged in the two year old consumer fraud case, where customers were promised the ASIC mining hardware for up-front payments. The dates kept getting pushed back, and back, and back until...well, you can figure out the rest. Many of the buyers who actually did receive their units got them so late [some as many as two years late] that the hashpower of the units no longer even remotely covered the cost of running them and actually making money on their investments. At the time, buyers were rushing to get their equipment before the halving of the BTC/block rate to 25, and now that it will be halved again to 12.5 sometime this year it seems highly unlikely that anyone would want the orders delivered anymore.

BFL claims to have shipped over 50,000 units during the four years it operated, but it's clear that there are currently millions of dollars in pre-orders still hanging fire, with little or no chance for refunds at this point.

https://www.ftc.gov/news-events/pre...-mining-operation-butterfly-labs-agree-settle

Unfortunately for the buyers who paid up front, though, it is extremely unlikely they will see their money returned:

Of the $38,615,161 judgment ordered against Butterfly Labs and Vleisides, the defendants are required to pay $15,000 and $4,000, respectively, after which the remaining amount will be suspended. A judgment of $135,878 against Drake will be suspended following receipt of payment constituting “the cash value of all Bitcoins she obtained using company machines”.

-from www.coindesk.com

http://arstechnica.com/tech-policy/...s-settles-with-ftc-for-38-6m-but-it-cant-pay/

http://www.coindesk.com/ftc-settles-charges-against-bitcoin-mining-firm-butterfly-labs/

 

[Daniel~]

This is why we are so reluctant to take a chance on something new. It always seems to come with criminals per-installed.

 

[booman]

Sometimes I wonder if criminals have a better understanding of technology than the people to release new technology?

 

[cloasters]

It's typical of the two tier justice, ahem, system to take so long to decide in favor of the "little guy." The "people" at Butterfly Labs had two entire years to skate away into the sunset.

 

[Gizmo]

The problem is that our technology is in the 21st century while our legal system is still in the 19th. Unfortunately, the only remedy seems to be to speed up the legal system. The problem with that approach is that decisions made in haste tend to be bad decisions.

One can argue that there is a lot of extraneous crap in our legal system that serves only to slow things down without helping achieve the end goal of 'justice'. I'll agree that it certainly seems that way, but not being a legal scholar, I really have nothing but my perceptions on which to base that agreement.

 

[Daniel~]

IMHO:
In a democracy where EVERYTHING depends upon the people understanding the law; There is no excuse for writing laws the average 6th grader can't understand.