United States tech firm sued over problems in delivering bitcoin machines
A company that offered bitcoin-generating computers is being sued by the US Federal Trade Commission (FTC), which said the company bilked as much as US$50 million from more than 20,000 consumers.
A company that offered bitcoin-generating computers is being sued by the US Federal Trade Commission (FTC), which said the company bilked as much as US$50 million from more than 20,000 consumers.
Butterfly Labs in Leawood in the US state of Kansas failed to deliver the machines or sent worthless equipment, according to the FTC's complaint filed in the district court in Kansas City.
The court had issued a temporary restraining order that shut down the business, according to an FTC statement, reported.
Bitcoins are a virtual currency that have gained traction as a way to buy and sell some goods and services instead of using government-issued money. They are created by computers set up to resolve complex algorithmic formulas.
Businesses and individuals can agree to do business using bitcoins instead of US dollars.
Butterfly Labs issued a statement on Tuesday calling the FTC's actions heavy-handed and said the lawsuit had blocked the company's ability to ship millions of dollars of orders on its books and issue requested refunds.
Butterfly has "shipped more than US$33 million in products to customers and voluntarily granted refunds approximating US$17 million to customers for cancelled orders," the company said. "The government wants to shut Butterfly Labs down, and we are not going away without a fight to vindicate bitcoin, our company and our employees."
The FTC contends the company failed to deliver equipment that customers had paid for in advance or delayed delivery so long that the equipment was ineffective for producing bitcoins. The agency said it had received hundreds of complaints about Butterfly Labs directly and thousands indirectly.
