Roughly 300 complaints have been filed with the US Federal Trade Commission against a Bitcoin hardware maker that has failed to ship product to customers. Butterfly Labs, a Kansas-based manufacturing company that provides hardware for virtual currency mining operations, has faced numerous accusations of fraud and is in federal court now with a lawsuit, having previously lost a 2013 civil suit. The complaints lodged against the company are from customers around the world, including Argentina, Canada, and Estonia, filed between September 2012 and April 2014 whose orders were never filled or else requested refunds that never materialized, according to Ars Technica. In the court documents it obtained, a Kansas federal judge told the company’s co-founder, Sonny Vleisides, “his company had a ‘strong smell’ of fraud about it during a probation hearing.” (He is on probation after entering a guilty plea in connection with a 2010 lottery scam. The judge extended his probation an additional two years.) Butterfly Labs has claimed it has experienced manufacturing delays. “In light of new details from the recently published transcript of that January 2014 probation hearing,” concluded Ars Technica, “the legitimacy of the Butterfly Labs operation could soon be decided once and for all.” The FTC merely fields complaints, acting on them as warranted, which may include and investigation and possible litigation. It does not guarantee those complaining consumers that they will receive any refund. (Ars Technica – 1)(Ars Technica – 2)
