Bitcoin business Butterfly Labs, shut down as ‘bogus,’ settles charges for $15000

The federal government has gained a $38.6 million judgment against Butterfly Labs, a Leawood-based seller of bitcoin machines, but agreed to collect only $15,000.

Butterfly Labs consented to the judgment under terms that essentially excuse it from any additional payments because of its limited financial resources. The agreement is based on financial information the company presented in U.S District Court.

“We’re paying $15,000 to settle this case,” said Michael Foster, an attorney at the Polsinelli law firm representing Butterfly Labs.

Officially, the judgment is suspended but could be reinstated if the company is found to have misrepresented its financial condition, or “if we lied about our financials,” Foster said.

Bitcoin is a digital currency that has gained traction among some consumers, businesses and governments. Bitcoins exist only digitally and are “mined” by using sophisticated computer equipment to verify increasingly difficult calculations that verify bitcoin transactions.

The Federal Trade Commission agreed to the settlement a year and a half after persuading a federal judge to shut down Butterfly Labs as a bogus business. It said the company had taken 20,000 consumers for up to $50 million.

FTC agents said they acted without notice to the company to preserve money they

Read more ... source: TheBitcoinNews

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