Almost 300 Complaints Filed With FTC About Bitcoin Mining Hardware Manufacturer

Super User
By Super User May 14, 2014 08:25


Almost 300 Complaints Filed With FTC About Bitcoin Mining Hardware Manufacturer

Story Highlights

  • FTC has received almost 300 complaints against Butterfly Labs in 18 months
  • Many claim company hasn't fulfilled orders, refunds denied

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News publication Ars Technica has an interesting report out this morning regarding a well-known bitcoin mining hardware manufacturer.

In a response to a Freedom of Information Act request submitted by Ars, we’re learning that almost 300 complaints have been filed with the Federal Trade Commission (FTC) regarding Kansas-based Butterfly Labs in the past 18 months.

Complaints come from here in the United States, Canada, all the way to Estonia and Argentina.

The common complaint? They say their orders were never completed or refund requests were flat-out denied or just never dealt with.

Writes one customer:

Butterfly Labs refuses to provide a date for shipment of their product. Meanwhile, continues to provide incentives to “upgrade” to other products that don’t yet exist either. All of my correspondence with them has failed to provide an “exact date your order will ship.” They have, however, used all of their resources to make products that obsolete their own products in a fraudulent attempt to coerce paying members to pay more for more phantom products. I have been waiting for over seven months now for this “product” to materialize — meanwhile, it becomes more and more worthless every day Butterfly Labs waits. The reasons for this are mathematical in nature (“BitCoin difficulty”) and difficult to articulate to a third party like the FTC. Butterfly Labs contends that their startup capital is the reason for their inability to produce the product. However, that should not be the burden of their customers… 

Another complaint:

Ordered in April they promised to deliver within 90 days.They failed!In the beginning of August they promised to deliver all open orders until end of september…they failed!!! And now going to the end of october they still are processing orders form february / march of this year.Over half an year later I don’t need the product anymore, but they are denaying [sic] giving me my money back.

All told, the 283 complaints amount to about $1 million in orders.

Despite customer complaints, Butterfly Labs CFO Bruce Bourne says customer satisfaction is the company’s goal.

“If there is a problem, we try to resolve it,” he said to Ars Technica. “We have shipped over 50,000 miners to date and continue to ship and deliver these products with a return rate below two percent. Developing and producing hand-designed ASICs and Bitcoin miners takes time to do right, and we will only deliver products after they are tested and reliable. Our return rate bears out our commitment to excellence and to our customers.”

What do you make of it?

You can view all of the complaints released in the FOIA request made by Ars here.

Source Ars Technica

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Super User
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A bitcoin enthusiast residing in Massachusetts, Eric got his news-writing start on his own technology blog from 2009-2011. He's also written for PetaPixel - a prominent photography blog. By day, he works in IT and has worked as a wire photographer for Retna.
  • nicolas

    Wonder how many complaints they have on cointerra with their similar business tactics

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