[NEWS] Butterfly Labs - Shut Down by US Government

[bigasic]

Sounds like ole' Sonny is going back to the pen. I believe he was still on probation, so they will throw him in asap for violating that, then the new charges, that will likely take a couple years to finish.. Once a crook, always a crook..

[Tigggger]

[Stratobitz]

Looking forward to a 140 BTC refund for my 2012 jalepeno and single order....

More detail on where the BTC money went. Basically the claim is from the get go they never planned to deliver. Crazy.

Federal authorities believe that the three named members of the company’s board of directors—Jody Drake (aka Darla Drake), Nasser Ghoseiri, and Sonny Vleisides—spent millions of dollars of corporate revenue on all kinds of things, including saunas and guns, while ignoring many customer orders that went unfulfilled or were significantly delayed.

http://arstechnica.com/tech-policy/2014/09/feds-label-bitcoin-miner-maker-butterfly-labs-as-systematic-deception/

Strato

[QuestionAuthority]

Aww, it's too bad that Josh is just an employee. I'd sure love to hear about him being raped is prison.

[LDeneault]

The question I have is this:  the FTC documents refer, in multiple places, to the "harm" done to customers by the seemingly intentional delays in hardware delivery.

As a former BFL customer - who was at least smart enough to get a refund at the first possible opportunity - since I've been harmed is BFL liable for my damages?  It would make things very, very interesting if BFL was held responsible for the potential losses caused by not delivering the hardware in the time they stated.

At the very least, they ought to have to pay some reasonable about of interest for all the pre-orders which were essentially 0% loans to them.

[Bogart]

Aww, it's too bad that Josh is just an employee. I'd sure love to hear about him being raped is prison.

http://www.butterflylabs.com/management-view/josh-zerlan-3/

"VP Product Development" sounds like a bit more than "just an employee".  In fact, isn't a severe failure of Product Development precisely the reason the company is now in this mess?

[opieum2]

They will be in receivership most likely at this point. At best you can hope they kept shitty books and you get a second refund lol. But somehow I doubt it. They will liquidate the hardware somehow at the cheapest cost somehow most likley just to ensure people all get made whole. There are plenty of ways this could go. FTC I do think will make an honest effort to make things right, but BFL likley has alot of it hidden out. And having their assets frozen at least makes it good for everyone. Homes will be sold, saunas auctioned off fancy cars, etc all auctioned off like they were drug dealers. Easy enough to recoup some if not all of the losses. But seems a stretch to expect interest, unless the FTC can make a solid case of it. Might be an untenable situation. FYI I too was lucky enough to get a refund, but it took nearly 6 months to make it happen. I placed an order of November of last year and quickly realized they were not going to deliver. January I started the refund process and they were not replying. At which point I filed with the FTC (yea BFL I am one of the 300 who filed....THIS IS SPARTA!!!!).

The question I have is this:  the FTC documents refer, in multiple places, to the "harm" done to customers by the seemingly intentional delays in hardware delivery.

As a former BFL customer - who was at least smart enough to get a refund at the first possible opportunity - since I've been harmed is BFL liable for my damages?  It would make things very, very interesting if BFL was held responsible for the potential losses caused by not delivering the hardware in the time they stated.

At the very least, they ought to have to pay some reasonable about of interest for all the pre-orders which were essentially 0% loans to them.

[MelMan2002]

I'm surprised that the hash rate on EMC hasn't dropped at all.

You don't expect to have their farm in their offices and registered under the same company name right? But I hope someone will tip FTC about EMC!

IIRC Josh ran EMC well before he ever got involved with BFL.

[QuestionAuthority]

Aww, it's too bad that Josh is just an employee. I'd sure love to hear about him being raped is prison.

http://www.butterflylabs.com/management-view/josh-zerlan-3/

"VP Product Development" sounds like a bit more than "just an employee".  In fact, isn't a severe failure of Product Development precisely the reason the company is now in this mess?

What a happy idea. We can only hope. Let's take up bounty for any inmate or guard that snaps a pic of Josh bent over a prison cot.

[ocminer]

I'm surprised that the hash rate on EMC hasn't dropped at all.

You don't expect to have their farm in their offices and registered under the same company name right? But I hope someone will tip FTC about EMC!

IIRC Josh ran EMC well before he ever got involved with BFL.

Thats correct but IIRC he sold EMC to BFL shortly after he started to work there.

[seriouscoin]

I'm surprised that the hash rate on EMC hasn't dropped at all.

You don't expect to have their farm in their offices and registered under the same company name right? But I hope someone will tip FTC about EMC!

IIRC Josh ran EMC well before he ever got involved with BFL.

he sold it to bfl

[Syke]

http://www.butterflylabs.com/management-view/josh-zerlan-3/

"VP Product Development" sounds like a bit more than "just an employee".  In fact, isn't a severe failure of Product Development precisely the reason the company is now in this mess?

Still just an employee. As much as I'd like for Josh to put on his big boy orange jumpsuit, he appears to have no ownership in the company and thus his liability is minimal. Fancy title means little. He had no authority to do anything.

[QuestionAuthority]

http://www.butterflylabs.com/management-view/josh-zerlan-3/

"VP Product Development" sounds like a bit more than "just an employee".  In fact, isn't a severe failure of Product Development precisely the reason the company is now in this mess?

Still just an employee. As much as I'd like for Josh to put on his big boy orange jumpsuit, he appears to have no ownership in the company and thus his liability is minimal. Fancy title means little. He had no authority to do anything.

Ur killin my buzz dude. 

[LDeneault]

Still just an employee. As much as I'd like for Josh to put on his big boy orange jumpsuit, he appears to have no ownership in the company and thus his liability is minimal. Fancy title means little. He had no authority to do anything.

Since part of the fraud revolves around intentionally delaying the delivery of hardware, his role at BFL would put him smack in the middle of things despite the fact that he doesn't own the company.

I think it would boil down to:

1.) Were there really delays in manufacturing the Monarch?
2.) When he made the public statements about delivery times, was he intentionally misleading customers?

The inability to deliver useful hardware in the stated time-frame would rest at the feet of the person in charge of such things, which would be Josh methinks.  That would put Josh's role in the center of the fraud.

[QuestionAuthority]

Still just an employee. As much as I'd like for Josh to put on his big boy orange jumpsuit, he appears to have no ownership in the company and thus his liability is minimal. Fancy title means little. He had no authority to do anything.

Since part of the fraud revolves around intentionally delaying the delivery of hardware, his role at BFL would put him smack in the middle of things despite the fact that he doesn't own the company.

I think it would boil down to:

1.) Were there really delays in manufacturing the Monarch?
2.) When he made the public statements about delivery times, was he intentionally misleading customers?

The inability to deliver useful hardware in the stated time-frame would rest at the feet of the person in charge of such things, which would be Josh methinks.  That would put Josh's role in the center of the fraud.

I like the way you think. 

[CoinHoarder]

http://www.butterflylabs.com/management-view/josh-zerlan-3/

"VP Product Development" sounds like a bit more than "just an employee".  In fact, isn't a severe failure of Product Development precisely the reason the company is now in this mess?

Still just an employee. As much as I'd like for Josh to put on his big boy orange jumpsuit, he appears to have no ownership in the company and thus his liability is minimal. Fancy title means little. He had no authority to do anything.

I can't find it right now, but someone with inside knowledge here on the forums stated that not everyone that had ownership in the company was charged, and then went on to state Josh was not charged in the same post. I am assuming he was alluding to at the very least Josh having at least a small ownership percentage.. he does seem pretty high up in the company.

[NotFuzzyWarm]

I'm surprised that the hash rate on EMC hasn't dropped at all.

I'm not.  If they are on there they are running small potatoes. I'm #4 there and running only 8TH. Biggest miner on EMC is 33 TH with #2 @ 20TH.

[jbrnt]

So the posts about the raid was real? I was sceptical at first, because I could find any source to confirm it. They really deserved it. BFL has tainted the bitcoin community for long enough.

[dogie]

So the posts about the raid was real? I was sceptical at first, because I could find any source to confirm it. They really deserved it. BFL has tainted the bitcoin community for long enough.

Yes they were. The court's filings were sent to a long list of people including ex employees, but were sealed until today. Hence we knew about their existence but couldn't prove it.

[Zelek Uther]

Don't worry Sonny, you will only be wearing your stylish new orange jumpsuit for Two Weeks^TM.