Butterfly Labs
| Industry | Mining hardware |
| Founded | June 2012 |
| Defunct | effectively ceased after February 2016 FTC orders |
| Headquarters | Kansas City, Missouri |
| Website | https://butterflylabs.com (archived) |
Butterfly Labs was a Missouri company that produced bitcoin ASIC mining hardware. It was founded in June 2012 by Nasser Ghoseiri and Sonny Vleisides and was headquartered in Kansas City. The firm was known for early ASIC miners aimed at bitcoin hashing, improving efficiency relative to CPU and GPU mining of the period.
Delivery controversies
Customers who pre-ordered mining equipment often waited months or longer for delivery, and some reported never receiving machines. The U.S. Federal Trade Commission sued in 2014, alleging unfair and deceptive practices around availability, profitability, and newness of mining machines and around keeping consumers' up-front payments while delaying or failing to deliver.
FTC settlement
On 18 February 2016 the FTC announced stipulated final orders with Butterfly Labs, part-owner and vice president of product development Sonny Vleisides, and general manager Darla Drake. The orders prohibit misrepresentations about whether a product can generate bitcoins or other virtual currency, about delivery dates, and about whether products are new or used. They also restrict taking up-front payments for mining machines unless the product is available and will be delivered within 30 days, with refund obligations if delivery misses that window, plus rules on refunds for damaged or defective goods and on permission before late delivery.[1]
The same release states partially suspended monetary judgments: $38,615,161 against Butterfly Labs and Vleisides, suspended upon payment of $15,000 by the company and $4,000 by Vleisides; and $135,878 against Drake, suspended once she surrendered the cash value of bitcoins obtained using company machines. Judgments were suspended based on inability to pay and could become due if financial condition had been misrepresented. Those large dollar figures are suspended judgment amounts, not a recorded customer-refund total.[1]
After the FTC orders the company effectively ceased operations. A precise final closure date after the February 2016 settlement is not established in the cited materials.