WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) has reached a settlement with Butterfly Labs and two of its operators over allegations they deceived consumers about the virtual currency known as Bitcoin.
In the FTC’s complaint, the agency alleged Butterfly Labs deceived thousands of consumers about the availability, profitability and newness of machines designed to mine Bitcoin. Butterfly Labs, according to the claims, charged consumers for its Bitcoin mining machines but then failed to deliver the computers until they were useless.
“Even in the fast-moving world of virtual currencies like Bitcoin, companies can’t deceive people about their products,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “These settlements will prevent the defendants from misleading consumers.”
Butter Labs, under the terms of the settlement, will be barred from misrepresenting to consumers whether a product or service can be used to generate Bitcoins. The defendants also cannot deceive consumers about the date at which they will receive their ordered products or services.
The commission voted 4-0 to approve the stipulated final order.