According to BizJournal coverage of the Butterfly Labs (BFL) FTC case, federal Judge Mark Wimes may be considering allowing the tainted Bitcoin mining company to reopen its doors in an attempt to make money to pay back customers from around the world. Butterfly Labs has been notorious in the Bitcoin mining space for failing to deliver on its promises, due to intentional and malicious business practices, according to the FTC. The FTC first shut down Butterfly Labs in September of 2014.
Butterfly Labs’ lawyer, Jim Humphrey of Polsinelli PC, emphasized to the judge that BFL had been fully compliant with the investigation and appointed receiver. Furthermore, Humphrey asserted that there was zero risk that his clients would dissipate assets ahead of the final ruling. He tried his best to convince the judge that if the end goal of this case is to return money to customers, Butterfly Labs needs to be reopened in order to make money to return to customers.
The FTC Lawyers made their case in court, reminding the public that Butterfly Labs would be operating with money “procured from deception.” According to business documents unveiled during the investigation, Butterfly Labs was originally bootstrapped with just $8,000 for website set up and initial launch to accept pre-orders. All the other millions that have been lost or are still up in the air were made from dubious pre-order tranches. The FTC would like to see their original plan come to fruition: the appointment of a receiver and the continued freeze of company and associated individuals’ assets.
Judge Wimes has not decided on a final decision, nor does he have a timeline for said decision; however, he told the press that Butterfly Labs was seeking an expedited decision.
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