Butterfly Labs Mining Rigs “Useful Only As Room Heaters”

Butterfly Labs, a Missouri based system builder who design and sell computers for mining Bitcoin, have landed themselves in trouble with the Federal Trade Commission (FTC). Butterfly Labs have been charging firms a total of up to $50m (around £30m) for systems and services that were so late they were useless and in some cases, they didn’t deliver the goods at all!

The FTC is saying that Butterfly have been selling Bitcoin mining machines, some of which cost up to $29,899 that are a complete waste of money. The FTC say these systems are only good as “room heaters”; ouch!

Butterfly claim their Monarch system, which only launched last August, is the fastest Bitcoin miner so far and with a price that went well into the thousands, people have been putting money down for the new systems and so far, not one customer has been supplied with one of the new systems.

Jessica Rich, director of the FTC’s bureau of consumer protection, said: “We often see that when a new and little-understood opportunity like Bitcoin presents itself, scammers will find ways to capitalise on the public’s excitement and interest.”

“It appears the FTC has decided to go to war on Bitcoin overall and is starting with Butterfly Labs.” said a Butterfly representative. “Butterfly Labs is being portrayed by the FTC as a bogus and fake company. To the contrary, Butterfly Labs is very real. As pointed out in court filings Butterfly Labs made last night, Butterfly Labs has shipped more than $33m (£20m) in products to customers and voluntarily granted refunds approximating $17m (£10m) to customers for cancelled orders.” they added.

Butterfly Labs will have a chance to state their case in court this Monday and while the company make a lot of big claims, I’m not so certain they’re going to have much luck. Their systems have been deemed worthless by FTC investigators, the mining boom is over and there are a lot of angry consumers who have given them money, but failed to receive any goods; long story short, don’t order a Butterfly Labs system any time soon, just to be safe.

Thank you Sky News for providing us with this information.

Image courtesy of Butterfly Labs.