Bitcoin Mining Company Butterfly Labs (BFL) Reopens; Starts Issuing Refunds

Infamous Bitcoin mining company Butterfly Labs (BFL) has reopened and has an updated website following their tussle with the FTC. The FTC started investigating Butterfly Labs in late 2014 because "consumers who have purchased the machines or services cannot use them to generate Bitcoins because Defendants [Butterfly Labs] never provide them with the machines or services." BFL would regularly mine on customers' hardware for days before finally shipping it out.

Also read: Judge Considers Allowing Bitcoin Mining Company Butterfly Labs (BFL) to Reopen

Butterfly Labs (BFL) Reopens

The Butterfly Labs' website now displays these messages describing their plans:

We remain as committed as ever to serving you, our customer, to the best of our capabilities going forward. However, after more than three months of closure or severely limited operations we need to assess the status of all aspects of our business and determine the damage caused; we ask that you please be patient as we restart full operations and try to mitigate the impact of the shutdown.

Butterfly Labs has started shipping their Monarch ASIC Bitcoin miner to customers that are still interested in receiving it. Butterfly Labs is trying to ship out items, but is also instituting a new refund system that is favorable to users, likely at the behest of the FTC.

Monarchs are currently shipping. We will notify any customers with orders ready for shipment to select whether they would prefer to take delivery of equipment or submit a request for a refund (see important details below regarding refunds).

BFL provided new refund information:

Refund and rebate payments will be processed in the order received (including those on hold during the FTC action).  We will resume paying refunds and rebates as soon as we’re operationally ready. We anticipate being able to start paying refunds in bitcoin in January. Because the cost of the Temporary Receivership and our legal defense against the FTC have consumed a substantial portion of our cash reserves, we anticipate being able to resume cash refund and rebate payments in late January or February.

Besides refunds, Butterfly Labs is also now offering "heavily discounted" cloud mining contracts, presumably with whatever hardware that they have remaining, to maintain some semblance of customer retention. Butterfly Labs presumably has a lot of lost revenue to make up for given the hiatus on operation during the FTC investigation. Previous BFL customers have the option of "upgrading" to cloud mining contracts or receiving refunds or hardware, which is not living up to promised performance specifications.

BFL's new site also seems to indicate that BFL is still looking to develop the BitSafe, perhaps their most well-received business idea ever. However, since BitSafe's concept launch (no hardware yet exists as far as we can tell) many actual Bitcoin hardware wallets such as Trezor and Ledger have come to fruition, while others such as Case are on the way.

There are scattered reports of BFL customers receiving their bitcoin refunds from BFL starting this week.

Images from Butterfly Labs and Shutterstock.

Share
Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.

Show comments

News Tip?

tips (at) ccn.com