Fed court shutters Butterfly Labs at FTC’s request

September 24, 2014

A federal court has shut down Butterfly Labs, a company that charged consumers thousands of dollars for specialized computers that it said produced Bitcoins.

The Federal Trade Commission had asked the court to shutter the company for not providing the computers or delivering them when they were “practically useless,” according to a press release issued by the FTC. 

Citing a Butterfly Labs employee, who said the steady march of time had left some of the computers as useful “as a room heater,” the FTC knocked the venture as costly to consumers.

Noting that “scammers will find ways to capitalize on the public's excitement and interest,” Jessica Rich, director of the FTC's Bureau of Consumer Protection, said “the commission looked “forward to putting the company's ill-gotten gains back in the hands of consumers.”