Court Order: Butterfly Labs Bitcoins To Be Sold

MrBingoBoingo writes In a new development in the case against Butterfly Labs, the court overseeing the case has ordered bitcoins held by Butterfly Labs to be turned over to the court-appointed temporary receiver. The order also gives the receiver authorization to convert the bitcoins "to cash on a systematic and reasoned basis." The justification for this measure is at least to ostensibly create reserves with which refunds for Butterfly Labs' customers may be paid.

Comments

Hardware Ponzi Scheme

[WhoBeDaPlaya]

I got in early on a bunch of their FPGA miners. Made obscene money mining and a tidy profit after I sold them and decided to quit mining.

Re:Hardware Ponzi Scheme

[ultranova]

A Ponzi scheme is when you use money from later investors to pay earlier ones to create an illusion of a profitable business where none exists. For a hardware vendor to pull a Ponzi scheme on their customers would require them to conduct some weird "send us a computer, we'll send you two later" stunt. Not delivering paid-for hardware is a simply fraud, not a Ponzi scheme.

Seriously, stop calling every shady business practice a Ponzi scheme.

Re:Hardware Ponzi Scheme

[ShaunC]

It sounds like you lucked out. From everything I've read, the business plan is indeed a pyramid of sorts,

1. Announce upcoming mining rig that beats everything on the market
2. Begin taking pre-orders
3. Use pre-order money to actually source the dream hardware you promoted in step 1
4. Hardware arrives, use it yourself for several weeks to mine your own BTC while it's still profitable
5. During this time, apologize to everyone who has placed orders and ensure them that delivery will be made soon
6. Once your new top-of-the-line rigs are a few weeks out of date, order a new round of even better hardware
7. Ship your rigs to your customers
8. Repeat ad infinitum

That you actually managed to get some rigs that were still worth using is pretty nice. I guess they hadn't yet figured out how the mining hardware pyramid is supposed to work. The fact that people are still falling for this ploy after it's played out several times over in very public fashion is rather depressing, though.

Re:So ... WTF is it?

[tyggna]

They were a circuit board and IC provider that specialized in bitcoin mining hardware.

Re:So ... WTF is it?

[jythie]

They were one of the early companies making ASIC Bitcoin rigs and had a bit of a reputation for long delayed delivery, often to the point the rigs could not make the money back.

Re:Nice

[stevez67]

Recognizing the value of an asset (e.g. stocks, bonds, paintings, sculptures and etc.) doesn't confer legitimacy as a currency.

Re:That was a near miss

[dex22]

I bought one of these. It took a VERY long time to arrive, and only worked for a few weeks. I contacted them for warranty repair and they simply never responded after that. I am out around $3000.

I'm not a fool or idiot. When I ordered, the marketplace was quite simple and they were the most promising option. It was only after most of us placed our orders with BFL that the trend in the market for pre-orders (and incredibly late deliveries) began, took shape and gained meaning as a deal-breaker.

The current bad actor in this is Black Arrow - and their reseller, MinerSource. They are 9 months behind on delivering Prospero X1s, and if you call or write, they tell you, "you can cancel your order, but there are no refunds. Here's a link to our non-existant terms you agreed to, which did not exist at the time."

Re:That was a near miss

[Cruciform]

I actually managed to get my refund back from BFL, shocking as it seems.
When I ordered the Monarch there was no "6 months before you can request a refund policy", but they still denied me the refund at first. And then immediately flagged my forum account as moderated.
When I used info from their site to contact the AGs in Kansas and Wyoming (they claim to be a Wyoming Corporation on their site, though Wyoming says they don't exist as an entity there at all) I posted it to see what the moderator would do. Instant ban.
Still, on the day the 6 months was up I requested my refund and two days after they said it was wired I got it back.
I was fortunate. There were other fellows on the BitcoinTalk forum out as much as 60K versus my 2K.

Re:That was a near miss

[WhoBeDaPlaya]

Was this for their ASIC or FPGA miners? To their credit, the FPGA miners worked well and ran reliably. Heard some grumblings about the bundled power bricks, but don't know about that since I ran mine off of a regular PSU.

Re:So ... WTF is it?

[aardvarkjoe]

To be fair, editors have to take guesses at what is going to be common knowledge in the readership vs things that need to be explicitly stated. It is not always an easy thing to get right, and always erring on the side of explaining is its own problem.

It's too bad that nobody has invented a method where a link to a full explanation could be included within the summary itself. Maybe when people start using this new-fangled "world wide web" thing, we'll be able to do cool things like that.