A federal commission has shut down Leawood, Kan., based company Butterfly Labs Inc., for failing to deliver high-powered Bitcoin mining equipment to customers on time.
The Kansas City Business Journal reports that the Federal Trade Commission believes Butterfly Labs took between $20 million and $50 million in specially designed computer orders from customers. Many of those orders didn't get delivered on time, or at all.
By the time they did arrive, the FTC says, they were, "practically useless." The computers are used to "mine" Bitcoins by unraveling complex algorithms and mathematical strings of code. When a block of code is cracked, the miner earns 25 Bitcoins — currently worth more than $10,000.
Butterfly Labs chief operating officer Josh Zerlan sat down with Brian Ellison on Central Standard a little more than a year ago to discuss how Bitcoin became such a popular, and lucrative, digital currency.
Butterfly Labs released a statement saying that it was in the process of shipping the computers that customers paid for and the company will be contesting the FTC's allegations of wrongdoing.
