Court Order: Butterfly Labs Bitcoins To Be Sold 66
MrBingoBoingo writes In a new development in the case against Butterfly Labs, the court overseeing the case has ordered bitcoins held by Butterfly Labs to be turned over to the court-appointed temporary receiver. The order also gives the receiver authorization to convert the bitcoins "to cash on a systematic and reasoned basis." The justification for this measure is at least to ostensibly create reserves with which refunds for Butterfly Labs' customers may be paid.
That was a near miss (Score:1)
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You're joking, right?
Re:That was a near miss (Score:5, Interesting)
I bought one of these. It took a VERY long time to arrive, and only worked for a few weeks. I contacted them for warranty repair and they simply never responded after that. I am out around $3000.
I'm not a fool or idiot. When I ordered, the marketplace was quite simple and they were the most promising option. It was only after most of us placed our orders with BFL that the trend in the market for pre-orders (and incredibly late deliveries) began, took shape and gained meaning as a deal-breaker.
The current bad actor in this is Black Arrow - and their reseller, MinerSource. They are 9 months behind on delivering Prospero X1s, and if you call or write, they tell you, "you can cancel your order, but there are no refunds. Here's a link to our non-existant terms you agreed to, which did not exist at the time."
Re:That was a near miss (Score:4, Interesting)
I actually managed to get my refund back from BFL, shocking as it seems.
When I ordered the Monarch there was no "6 months before you can request a refund policy", but they still denied me the refund at first. And then immediately flagged my forum account as moderated.
When I used info from their site to contact the AGs in Kansas and Wyoming (they claim to be a Wyoming Corporation on their site, though Wyoming says they don't exist as an entity there at all) I posted it to see what the moderator would do. Instant ban.
Still, on the day the 6 months was up I requested my refund and two days after they said it was wired I got it back.
I was fortunate. There were other fellows on the BitcoinTalk forum out as much as 60K versus my 2K.
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Of course there are reasons why BFL is getting in trouble here.
My question is when did you place your order with them? I'm not part of that scene, but I know there have been serious questions about BFL for a very long time. My friend got kicked out of CES in January 2013 for causing a scene at their booth, basically accusing them of being scammers.
Re:That was a near miss (Score:4, Interesting)
Hardware Ponzi Scheme (Score:5, Interesting)
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I don't know if ponzi scheme is exactly right. BFL is a shit company, for sure. They lied about release dates, lied about when they'd ship stuff out, lied about performance, treated customers poorly, ripped some people off outright by not sending them hardware, made a fool of themselves socially by telling customers if they complained publicly they'd refuse to ship them hardware, and then lowered the cost of hardware before they even shipped the stuff to the first guys (and randomly raised it too).
But pon
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In a completely different industry, you see this basic pattern with people on Ravelry who try to dip into selling yarn they spin. Sometimes you will get people who honestly want to do it but just don't have the skills or resources to deal with the project they take on. They work hard, things start to fall apart, they panic, and then the PR mess starts.
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What apparently happened is that they were going in to take advantage of the fact that BTC were still minable without heavy duty ASICs, but people were wanting something to make coins.
Of course, the main thing is that the company tried to make money and split during a time where so many people came to the BitCoin table, but before the players with vast CPU power that it made it pointless for all except them to bother mining coins. A box on my desk which has to mine at least five coins before I see any retu
Re:Hardware Ponzi Scheme (Score:5, Insightful)
A Ponzi scheme is when you use money from later investors to pay earlier ones to create an illusion of a profitable business where none exists. For a hardware vendor to pull a Ponzi scheme on their customers would require them to conduct some weird "send us a computer, we'll send you two later" stunt. Not delivering paid-for hardware is a simply fraud, not a Ponzi scheme.
Seriously, stop calling every shady business practice a Ponzi scheme.
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You can run a Ponzi scheme with hardware. It costs you $125 to make an X, and you anticipate cascading sales so you sell an X for $100. You have to send something to your earlier customers, so you use money from your later customers to produce it. You figure when your peak likely is, so you loot the company and vanish.
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I essentially accused them of this a year or so ago. I managed to get my CC company to refund two charges (undelivered items), after clearly outlining my theory and showing several cases where I suspected them of fraud; the one I got stuck with (because I paid cash, silly me), eventually crapped out. I got no response from them about it, either (it's a smaller ASIC 5 gh/s).
I'd like to see some of them go to jail...
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It sounds like you lucked out. From everything I've read, the business plan is indeed a pyramid of sorts,
So ... WTF is it? (Score:2, Insightful)
Since TFA and TFS don't actually use any big-boy words to tell us who the hell Butterly Labs are ... what the hell are they and why the hell should I care?
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Re:So ... WTF is it? (Score:4, Insightful)
To be fair, editors have to take guesses at what is going to be common knowledge in the readership vs things that need to be explicitly stated. It is not always an easy thing to get right, and always erring on the side of explaining is its own problem.
It's too bad that nobody has invented a method where a link to a full explanation could be included within the summary itself. Maybe when people start using this new-fangled "world wide web" thing, we'll be able to do cool things like that.
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That link you describe? Man it sounds hyper!
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Re:So ... WTF is it? (Score:5, Informative)
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They made "shovels" that people could use to mine for bitcoins. Except the shovels weren't available for shipment, but they took pre-orders (and payment) anyways. Most of the shovels never got shipped, and when some customers did receive shovels, it seemed that the shovels have been used already, possibly by the company.
So the company sat on a pile of cash from pre-orders, didn't ship shovels to customers, used the customers shovels to mine for bitcoins, and then eventually shipped some of these used shov
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No, they recognized the mining rigs as having value, and that they were either delayed to the point of obsolescence or never shipped at all.
Re:Nice (Score:5, Insightful)
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At least, it does offer "some" legitimacy.
Judge Judy [judgejudy.com] threw a case out once because both parties had colluded to try to avoid paying taxes, by marking the value of a car as $1 on the title of ownership, despite contrary proof that the transaction had been for several thousand dollars.
Then she said something like:
Taxes pay for this court. Taxes pay my salary. If you choose to make a contract that goes outside the law, don't expect the justice system to support that contract when something goes wrong. The same goes for drug dealers who have a drug deal go bad, or someone who knowingly buys stolen property.
Just imagine if a judge who doesn't like bitcoins, or just doesn't understand them, had said something similar about bitcoins. That would have set a precedent and that would have been a PR-nightmare
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I don't believe the feds ever really rejected crypto currency or refused to acknowledge it. in fact didn't they come out recognizing its legality and all
History (Score:1)
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Refund in cash? (Score:3)
If I had acquired my Bitcoins when they were worth over 800$USD, I would sure as hell prefer to be refunded in Bitcoins.
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If I had acquired my Bitcoins when they were worth over 800$USD, I would sure as hell prefer to be refunded in Bitcoins.
That makes no sense. You want to be refunded with an asset that is worth a fraction of what you paid for it? If it's cash, at least one could argue for suing for the old value of the coins, though you may not succeed or be able to collect. But by refunding in bitcoin you guarantee that outcome.
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If they refund using the value of Bitcoins at the time of purchase, then fine. If they refund with today's value, I'd prefer Bitcoins, just in case in goes up again.
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So take the cash and immediately purchase new bitcoins so it can go up again. The courts don't hand over businesses physical assets to investors, they sell everything then disburse the cash so there's no claim that someone got treated unfairly.
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Actually it makes plenty of sense. The choice of whether or not to realize a capital loss should be his. If he pays BTC and gets refunded in cash, that complicates matters. My understanding of how the IRS would treat this is hazy, as I'm neither a tax expert nor a BTC user; but it's not totally out to lunch. He may have to write down the loss when he really wasn't looking to do a tax-loss sale. Even if the tax issue were not in play, the decision of when to convert should be his.
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devices is a perfectly good plural, dont reinvent the wheel.
Of course, they wouldn't want to be refunded in (Score:2)
bitcoins!
It is now time... (Score:2)
To get rid of your BitCoin because you can bet the exchange rate will be trending down as they sell...
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Word got around a couple years ago. They told everyone to fuck off and kept their deposits.
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It's built into the design of bitcoin. It automatically adjusts the difficult of mining up (never down) based on the rate at which coins are mined in heats. Every time a faster ASIC for mining comes out, the difficulty shoots up correspondingly. At best you can mine a good percentage of the blocks in the current heat with a new machine before the difficulty shoots back up and the new ASIC performance is the new baseline The new asics are still better than the poor schmoes running regular cpus or gpus, bu
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Despite the substantial presense of scammers it's clear that some ASICs have made it to customers.
Also theres suspicion that the reason many ASIC devices were delayed until they were no longer profitable was because the makers were mining themselves rather than fulfilling orders.
There have also been reports of some big bitcoin mining operatinons starting up, possiblly big enough to bypass the bullshit and get their own chips made.