Re: Butterfly Labs CEO 25 Million USD Mail Fraud — A Concise Summary of Evidence

[MPOE-PR]

Yeah, I'm having a hard time writing them off as a scam, even in the face of previous grievous altercations.

For most legitimate businesses this usually works the other way around, customers have too easy a time writing them off even for no good reason.

I tried finding information about the london conf, pictures, video, anything... and failed.
Would have been nice to see some lousy cell phone vid of the jalapeno... but that kind of stuff is very hard to do for non-techy folks like bitcoin users.

It's still not clear anyone actually involved in bitcoin was actually there.

whoa whoa whoa, back the forum train up a bit here.  What the fuck are any of you in the last 1.5 pages talking about?!  There was some conference and he was there in person?  They showed up with an ASIC miner and auctioned it off?!  They just literally said 2 days ago that they aren't finished and they don't have a single working ASIC miner in their company's hands.  They assured everyone of this.  So they showed up at some alleged conference that someone posted about out on nowhere and not 1 single person took a photo? Not one single Bitcoin Talk forum member who attended this huge, elaborate, epic event owns a cell phone with a camera or thought it was worth snapping a photo?  Do you fake ass forum members posting all this pretend bullshit really believe anyone to believe it?  Mods, get out the ban hammer hard.  That or some of you better start explaining

WHAT

THE

FUCK

Are any of you talking(/lying?) about?!?!?!

I lolled.

...And yes, there was a conference, a few hundred people attended including some top dev's and pool operators...

Were they real people or just virtual sock puppets?

They were ven developers.

Posting this here, as the thread was voted into invisibility on /r/bitcoin:

It has been demonstrated that BFL Single is a pair of Altera EP3SL150F780 chips.

This chip is no longer manufactured, and the official price from digikey, Altera's authorized distributor, is $2,184.99 per chip.

That's almost $4,400 per board just for the chips.

Obviously since the single sells for $600 they are not paying anything close to full price for these chips. But since they are no longer manufactured there is a finite supply, and with the huge demand they surely can see that the End Is Near for the Altera-based product line.

So now it fits together: they aren't ruining a good thing -- the good thing is over whether they like it or not.

They have run out of cheap chips. Without the insane more-than-5x cost advantage over the competition they can't compete anymore, so they pretty much have to close up shop.

But wait.

If you have to close up shop anyways, why not go out with a bang? Especially when you have an experienced fraudster running the company? The company is toast without the cheap chips anyways, so why not run off with a pile of preorder cash? Better yet, tell the people you sold product to that they can send the boards back as part of a "trade in". Remember, there are no more cheap chips, so the supply of these boards is about to get cut off. And mining boards turn electricity into anonymous, untraceable cash, so running off with them is about as safe as running off with BTC.

You may or may not believe their ASIC announcement is a scam, but either way the claim that "oh they have so much to lose by scamming people why would they do that" doesn't hold water. Their existing product line has a fixed lifespan -- ASIC or not.

http://www.reddit.com/r/Bitcoin/comments/1084b1/why_would_bfl_turn_a_good_thing_into_a_scam/

So wait, they never made FPGAs?

[ydenys]

Yes, taken into consideration the lack of info on your/competitors’ products the benefit of the doubt is a given. No point to post angrily over it.

Okay, Josh, I believe it was you, who had proven that initial (first generation) BFL’s product was real and the whole operation took off because of it. (Please do correct me if i’m wrong) While it does seems ‘unfair’ that after donning staff’s mantle you no longer enjoy the same trust, why can’t you consider doing the same with the current generation using another ‘trusted’ community member/pool operator? Why was not it done properly in London, where you had allegedly had a working prototype? Please do not just go ‘free strategic information’ again, there are plenty of ways around it, and all what such a demo could do (provided at least key info is true and you are not unreasonably late with your product) is not only to confirm your market share but also gain you plenty of new customers.

[Melbustus]

...snip: lots of indignant dodgy non-responses...

My response:  Absolutely fucking ridiculous.

Wow, I was undecided until reading this "response", Inaba. Now, my current viewpoint is that it's EXTREMELY unlikely that a legitimate business, especially a startup, seeking long-term customer relationships would respond anywhere near as angrily and childishly as you just did.

On the off-chance that BFL *is* legit, they need to fire you, or at least take away your ability to say anything on their behalf anywhere. That post was the type of "response" that ends careers.

[franky1]

INABA and BFL both stated that butterfly labs make custom chips...
yet........ its not a custom chip designed by BFL

it's a altera atratix3 EP3SL150F780 FPGA.

so goodluck BFL talking yourselves out of your websites quote for last 11 months:
quote: Butterfly Labs manufactures a line of high speed encryption processors for use in research, telecommunication and security applications.

if you cannot design a custom chip and need to import it at FPGA level. then designing a ASIC chip will be even harder to produce.

would love to see their dust free lab where they make their chips..

<wait for inaba's standard flaming waffles of ASCII characters without counter-proof in reply>

[Portnoy]

...snip: lots of indignant dodgy non-responses...

My response:  Absolutely fucking ridiculous.

Wow, I was undecided until reading this "response", Inaba. Now, my current viewpoint is that it's EXTREMELY unlikely that a legitimate business, especially a startup, seeking long-term customer relationships would respond anywhere near as angrily and childishly as you just did.

+1 

Inaba, even if you think this forum is "unbecoming of a venue for public discourse" you are still here speaking on behalf of BFL. 

Your lack of professionalism alone is enough to make me not want to ever do business with BFL. 

But add to that the news about the convicted scammer in charge... and his delay in responding to concerns... well Jesus! 
How could you ever think people would 'not' be upset, especially given the recent history of scams in Bitcoin land??? 

[fcmatt]

Yeah, I'm having a hard time writing them off as a scam, even in the face of previous grievous altercations.

For most legitimate businesses this usually works the other way around, customers have too easy a time writing them off even for no good reason.

I tried finding information about the london conf, pictures, video, anything... and failed.
Would have been nice to see some lousy cell phone vid of the jalapeno... but that kind of stuff is very hard to do for non-techy folks like bitcoin users.

It's still not clear anyone actually involved in bitcoin was actually there.

whoa whoa whoa, back the forum train up a bit here.  What the fuck are any of you in the last 1.5 pages talking about?!  There was some conference and he was there in person?  They showed up with an ASIC miner and auctioned it off?!  They just literally said 2 days ago that they aren't finished and they don't have a single working ASIC miner in their company's hands.  They assured everyone of this.  So they showed up at some alleged conference that someone posted about out on nowhere and not 1 single person took a photo? Not one single Bitcoin Talk forum member who attended this huge, elaborate, epic event owns a cell phone with a camera or thought it was worth snapping a photo?  Do you fake ass forum members posting all this pretend bullshit really believe anyone to believe it?  Mods, get out the ban hammer hard.  That or some of you better start explaining

WHAT

THE

FUCK

Are any of you talking(/lying?) about?!?!?!

I lolled.

...And yes, there was a conference, a few hundred people attended including some top dev's and pool operators...

Were they real people or just virtual sock puppets?

They were ven developers.

Posting this here, as the thread was voted into invisibility on /r/bitcoin:

It has been demonstrated that BFL Single is a pair of Altera EP3SL150F780 chips.

This chip is no longer manufactured, and the official price from digikey, Altera's authorized distributor, is $2,184.99 per chip.

That's almost $4,400 per board just for the chips.

Obviously since the single sells for $600 they are not paying anything close to full price for these chips. But since they are no longer manufactured there is a finite supply, and with the huge demand they surely can see that the End Is Near for the Altera-based product line.

So now it fits together: they aren't ruining a good thing -- the good thing is over whether they like it or not.

They have run out of cheap chips. Without the insane more-than-5x cost advantage over the competition they can't compete anymore, so they pretty much have to close up shop.

But wait.

If you have to close up shop anyways, why not go out with a bang? Especially when you have an experienced fraudster running the company? The company is toast without the cheap chips anyways, so why not run off with a pile of preorder cash? Better yet, tell the people you sold product to that they can send the boards back as part of a "trade in". Remember, there are no more cheap chips, so the supply of these boards is about to get cut off. And mining boards turn electricity into anonymous, untraceable cash, so running off with them is about as safe as running off with BTC.

You may or may not believe their ASIC announcement is a scam, but either way the claim that "oh they have so much to lose by scamming people why would they do that" doesn't hold water. Their existing product line has a fixed lifespan -- ASIC or not.

http://www.reddit.com/r/Bitcoin/comments/1084b1/why_would_bfl_turn_a_good_thing_into_a_scam/

So wait, they never made FPGAs?

I dont feel like choppin up quotes on a tab.

I meant if they had a jally at the london conf why cannot i seem to find pics, vid, or someone posting they were amazed by it?

[Littleshop]

INABA and BFL both stated that butterfly labs make custom chips...
yet........ its not a custom chip designed by BFL

it's a altera atratix3 EP3SL150F780 FPGA.

so goodluck BFL talking yourselves out of your websites quote for last 11 months:
quote: Butterfly Labs manufactures a line of high speed encryption processors for use in research, telecommunication and security applications.

The website says 'encryption processors', and in technical speak that can be EITHER a chip or a finished product.  Clearly BFL manufactures the finished product, going so far as to populate chips onto a board and final assembly.  That is more then most companies do, most just have the whole thing built in China.   Their quote is not even a stretch for marketing speak. 


As for any talk about the availability of the EP3SL150F780 it is all over Alibaba.com and they could easily get both the quantity and the price required to build as many BFL Singles as the community could order. 

 

[BitcoinINV]

Yeah, I'm having a hard time writing them off as a scam, even in the face of previous grievous altercations.

For most legitimate businesses this usually works the other way around, customers have too easy a time writing them off even for no good reason.

I tried finding information about the london conf, pictures, video, anything... and failed.
Would have been nice to see some lousy cell phone vid of the jalapeno... but that kind of stuff is very hard to do for non-techy folks like bitcoin users.

It's still not clear anyone actually involved in bitcoin was actually there.

whoa whoa whoa, back the forum train up a bit here.  What the fuck are any of you in the last 1.5 pages talking about?!  There was some conference and he was there in person?  They showed up with an ASIC miner and auctioned it off?!  They just literally said 2 days ago that they aren't finished and they don't have a single working ASIC miner in their company's hands.  They assured everyone of this.  So they showed up at some alleged conference that someone posted about out on nowhere and not 1 single person took a photo? Not one single Bitcoin Talk forum member who attended this huge, elaborate, epic event owns a cell phone with a camera or thought it was worth snapping a photo?  Do you fake ass forum members posting all this pretend bullshit really believe anyone to believe it?  Mods, get out the ban hammer hard.  That or some of you better start explaining

WHAT

THE

FUCK

Are any of you talking(/lying?) about?!?!?!

I lolled.

...And yes, there was a conference, a few hundred people attended including some top dev's and pool operators...

Were they real people or just virtual sock puppets?

They were ven developers.

Posting this here, as the thread was voted into invisibility on /r/bitcoin:

It has been demonstrated that BFL Single is a pair of Altera EP3SL150F780 chips.

This chip is no longer manufactured, and the official price from digikey, Altera's authorized distributor, is $2,184.99 per chip.

That's almost $4,400 per board just for the chips.

Obviously since the single sells for $600 they are not paying anything close to full price for these chips. But since they are no longer manufactured there is a finite supply, and with the huge demand they surely can see that the End Is Near for the Altera-based product line.

So now it fits together: they aren't ruining a good thing -- the good thing is over whether they like it or not.

They have run out of cheap chips. Without the insane more-than-5x cost advantage over the competition they can't compete anymore, so they pretty much have to close up shop.

But wait.

If you have to close up shop anyways, why not go out with a bang? Especially when you have an experienced fraudster running the company? The company is toast without the cheap chips anyways, so why not run off with a pile of preorder cash? Better yet, tell the people you sold product to that they can send the boards back as part of a "trade in". Remember, there are no more cheap chips, so the supply of these boards is about to get cut off. And mining boards turn electricity into anonymous, untraceable cash, so running off with them is about as safe as running off with BTC.

You may or may not believe their ASIC announcement is a scam, but either way the claim that "oh they have so much to lose by scamming people why would they do that" doesn't hold water. Their existing product line has a fixed lifespan -- ASIC or not.

http://www.reddit.com/r/Bitcoin/comments/1084b1/why_would_bfl_turn_a_good_thing_into_a_scam/

So wait, they never made FPGAs?

I dont feel like choppin up quotes on a tab.

I meant if they had a jally at the london conf why cannot i seem to find pics, vid, or someone posting they were amazed by it?

Thats a great point about the pics, that would be the prime place to show it right? I was not going one way or the other but I am slowly leaning against them.


Three quick questions, you know, in the interest of transparency and all:

Is Sonny Cris Vleisides the founder of BFL?
What is the contact information of his parole officer?
What is your response to the following:

1. The very specific answer to your question is no. I don't expect you to be satisfied with this answer, but it's what you get.
2. You have got to be joking, right?


There should be better answers then this......

[MrTeal]

I've been posting negatively about this as much as anyone, but some of these are just ridiculous. They aren't going to give you contact information about his parole office any more than they're going to give you his wife's cell number.

BFL is an incredibly opaque company, their business practices come off as pretty skeezy, and one of their employees is most likely a scammy sack of shit, but that doesn't mean that this entire thing is a scam. It doesn't mean it isn't either and Inaba could likely do a hell of a lot better job of interfacing to the community to assuage those who are on the fence that it's not all a con, but if they don't there's not a whole lot that can be done about it.

[BitcoinINV]

Why would they not give it? Someone could submit a request and get it at any time, its public information.

[MrTeal]

Why would they not give it? Someone could submit a request and get it at any time, its public information.

I'll have to take your word on that as I'm not an American, but I find it hard to believe that a random person with no valid reason to demand the information could petition the court to reveal Sonny's parole officer.

[fcmatt]

I've been posting negatively about this as much as anyone, but some of these are just ridiculous. They aren't going to give you contact information about his parole office any more than they're going to give you his wife's cell number.

BFL is an incredibly opaque company, their business practices come off as pretty skeezy, and one of their employees is most likely a scammy sack of shit, but that doesn't mean that this entire thing is a scam. It doesn't mean it isn't either and Inaba could likely do a hell of a lot better job of interfacing to the community to assuage those who are on the fence that it's not all a con, but if they don't there's not a whole lot that can be done about it.

Those with an ounce of common sense dont rush to give money to companies that could possibly have vaporware.
It is a shame that so many here, being so greedy and lacking in sound judgment, rush to hand over money without thinking it through, demanding proof or reasonable updates. Until many members here get burned multiple times it will not change even though i am finally seeing some change. It only took the pirate fiasco to really start the ball rolling after so many other examples.

Those who ordered will not ask for refunds. Greed has them and they like the risk like a drug user likes the high.
So bfl WILL get to play this as they wish. Like you said, nothing to be done about it when you have so many people willing to hand over 1000s of dollars for the chance to make some peanuts.. Er btc...

Me? I will patiently wait for the dust to settle. I am content with my usd/btc in my pocket and not controlled by others who seem happy to consider their customers guinea pigs in the attempt to make a few bucks.

Bfl will probably deliver, albiet late as usual, for customers but they can do it on other peoples money. Not mine.
Bitcoin and scams are way to dominant around here for my taste.  And no matter the delivery the crap storm that will take place from most of the customers will be hilarious as the jealousy comes out versus those who have early versus those who do not.
Rest assured most early mined btc will be bfl's.

[CJGoodings]

If it looks like a scam, and sounds like a scam, and smells like a scam... then its prolly a ____. (guess, its a 4 letter word)

There's no exceptions to that rule, even if ___ supposedly developed their own fpgas (which has been proven to be bupkis).

BFLs Game Plan.
1. Buy somebody else's shit.
2. Slap a sticker on that bitch.
3.
4. Profit.

[niko]

Why would they not give it? Someone could submit a request and get it at any time, its public information.

I'll have to take your word on that as I'm not an American, but I find it hard to believe that a random person with no valid reason to demand the information could petition the court to reveal Sonny's parole officer.

On the contrary. Anyone can call the probation department and provide information/concerns to the PO. The PO will not provide any information, of course, but will listen.

[MrTeal]

Why would they not give it? Someone could submit a request and get it at any time, its public information.

I'll have to take your word on that as I'm not an American, but I find it hard to believe that a random person with no valid reason to demand the information could petition the court to reveal Sonny's parole officer.

On the contrary. Anyone can call the probation department and provide information/concerns to the PO. The PO will not provide any information, of course, but will listen.

Interesting. Does that mean you can just contact the federal probation services, or you can actually call up the probation officer working his case?

[BitcoinINV]

Request information on the whereabouts of the paroled inmate through the United States Department of Justice. The FOIA (Freedom of Information Act) provides access to the records that you will need, as long as the right information is provided and there are no security reasons preventing their release. Write "Freedom of Information Act Request" on the envelope and provide a reason for the information you are seeking and the details of the paroled inmate

 eHow.com http://www.ehow.com/how_5749812_federal-inmate-parole.html#ixzz27AKtgCRc

If anyone has a stamp lol

[kiba]

What a lame debate. All we have to do is wait six weeks. If they ship it, apologize. If they don't, you can whine and complain and do whatever you guys do.

[blakdawg]

Vleisides is on probation, not parole. His supervision was transferred from CA to the Western District of Missouri.

[niko]

Why would they not give it? Someone could submit a request and get it at any time, its public information.

I'll have to take your word on that as I'm not an American, but I find it hard to believe that a random person with no valid reason to demand the information could petition the court to reveal Sonny's parole officer.

On the contrary. Anyone can call the probation department and provide information/concerns to the PO. The PO will not provide any information, of course, but will listen.

Interesting. Does that mean you can just contact the federal probation services, or you can actually call up the probation officer working his case?

I've never done it myself, but from what I gather you can call the probation department and ask to talk to a PO handling a particular case.

[BitcoinINV]

What a lame debate. All we have to do is wait six weeks. If they ship it, apologize. If they don't, you can whine and complain and do whatever you guys do.

True but 6 weeks from today would put them in NOV.... and thats already past due...