(The Hosting News) – The FTC has temporarily shut down a Missouri based company due to allegations of a Bitcoin mining scam.
According to CNet, the FTC claims Butterfly Labs sold Bitcoin mining computers to customers but did not deliver the shipments.
“We often see that when a new and little-understood opportunity like bitcoin presents itself, scammers will find ways to capitalize on the public’s excitement and interest,” said FTC’s director of the Bureau of Consumer Protection, Jessica Rich. “We’re pleased the court granted our request to halt this operation, and we look forward to putting the company’s ill-gotten gains back in the hand of consumers.”
The FTC’s complaint states that as of September 2013, the company failed to ship devices to more than 20,000 customers who had already paid for the computers that cost around $149 to $30,000, FoxBusiness reports.
“Butterfly Labs intends to defend our business and our nascent and promising industry. The government wants to shut Butterfly Labs down, and we are not going away without a fight to vindicate Bitcoin, our company, and our employees,” said Butterfly Labs in a statement on Tuesday. “Butterfly Labs is being portrayed by the FTC as a bogus and fake company. To the contrary, Butterfly Labs is very real.”
Butterfly Labs has refunded around $17 million in refunds and shipped more than $33 million in products.