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FTC settles in case against Bitcoin mining company Butterfly Labs

Friday 19 February 2016 | 11:52 AM CET

The US Federal Trade Commission (FTC) has reached a settlement with Bitcoin mining hardware maker Butterfly Labs after it sued the company in 2014.

At the time, the FTC accused Butterfly Labs of deceptive business practices related to the development and sale of Bitcoin mining equipment, as well as the receipt of customer funds for product preorders.

Of the USD 38,615,161 judgment ordered against Butterfly Labs and Vleisides, the defendants are required to pay USD 15,000 and USD 4,000, respectively, after which the remaining amount will be suspended.

According to the FTC, these suspensions are due to an inability on the part of the defendants to pay. Butterfly Labs, Fleisides and Drake would be required to pay the full amounts in the event the terms of the agreement are broken.

The settlement comes more than a year after the federal agency shuttered the company following an investigation into suspected fraud. That investigation was sparked by a wave of complaints submitted to the FTC by customers of the mining firm. Butterfly Labs later reopened following court approval.

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