Butterfly Labs Issues Statement Regarding FTC Complaint

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Earlier today, it was reported that Butterfly Labs was the target of a Federal Trade Commission civil lawsuit, which alleged the company has conducted fraudulent and deceptive business with customers — many of whom are in the United States.

The Federal Trade Commission effectively has put a halt on the Kansas-based company’s operations — freezing assets and forcing an injunction that has brought the assembly line to a grinding halt.

And Butterfly Labs isn’t taking kindly to the actions.

In a lengthy statement issued by the company’s spokesperson, Butterfly Labs suggests the Federal Trade Commission is “going to war with bitcoin” and they’re starting by taking out Butterfly Labs. It’s an interesting perspective, but one many would disagree with.

Here’s the full, unabridged statement issued Tuesday evening:

Butterfly Labs is disappointed in the heavy-handed actions of the Federal Trade Commission. In a rush to judgment, the FTC has acted as judge, jury and executioner, contrary to our intended system of governmental checks and balances. The FTC’s current actions are negatively impacting our thousands of customers and our dozens of employees. Their current media campaign should only further alarm a knowing citizenry and raise questions as to why the FTC wouldn’t simply let this case play out through the judicial system. That is what Butterfly Labs intends to do.

It appears the FTC has decided to go to war on bitcoin overall, and is starting with Butterfly Labs. 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 $33 million in products to customers and voluntarily granted refunds approximating $17 million to customers for cancelled orders. Butterfly Labs was literally is in the midst of shipping out completed products to fulfill the remaining millions of dollars of orders on our books and issuing requested refunds, when the FTC effectively closed the doors of Butterfly Labs without any chance to be heard in court.

At this time, Butterfly Labs is cooperating fully with the Temporary Receiver appointed by the Court. A hearing is set for September 29 and Butterfly Labs has asked the Court to allow it to present testimony from key witnesses for the company. 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. Our continued focus is our customers and finding a way to continue to deliver products and processing refunds for those who have requested them.

Many in the community have felt that Butterfly Labs has continuously failed to meet expectations, though the company has been working to repair their tarnished image.

Its future, however, is uncertain.

As noted in the statement, the company will be taking advantage of a hearing later this month to clear their name. More developments on this front as they become available.