Missouri-based startup Butterfly Labs was shutdown by the FTC back in september. In June of 2012, Butterfly Labs became one of the first companies to announce a breakthrough in mining technology: application-specific integrated circuits, or “ASICs,” designed specifically to mine bitcoin 1,000 times faster. Butterfly Labs promised their customers that preorders would ship as soon as possible. But they soon became evasive, issuing a series of shifting dates. In the end, many customers either received their shipment months later or did not receive it at all. By the time the ASICs were in the customer’s hands their course had run through and they were no longer profitable. In total, more than 20,000 who paid for an ASIC never received their order.
On November 4th, the FTC granted approval for Butterfly Labs to convert their bitcoin holdings to cash reserves in order to start refunding their customers. The court order said:
“In this respect and under the supervision of temporary receiver, the following actions may occur immediately […] conversion of receivership defendant’s substantial bitcoin holdings to cash on a systematic and reasoned basis.””
According to the following analysis done by the user rockettilt on r/Bitcoin Butterfly Labs has atleast 94,000 bitcoins still in their possesion.
On December 23 a Missouri court ordered a wind down of Butterfly Labs and they began a refund plan…..now here is my theory…I was looking at the blockchain and came across a 5000 btc utxo taken incrementally down to 0….it was sold off continuously. It took me to here.
https://blockchain.info/address/12WRnQR85ZUT7dhmaHBNL5dde2QLYieW6v
Activity on that address started back up on 12/23 the day the courts provided control again. Ive tied it to butterfly labs because a OP_RETURN said paycoin.com linked to Josh Zerlan an employee of butterflylabs.
What is scary is another 90000 unspent coins reside here also controlled by butterfly labs.
https://blockchain.info/address/1B9KrM7bjhJ42qJSWr1KJrNTAP1SNGMpJu
I think youll have butterfly labs forced to continue to sell the remaining 94000 coins in this court mandated wind down in order to provide refunds to those customers….That is a ton of coins to continuously dump…it exceeds 24 hour volume on the largest exchange.
source: http://www.reddit.com/r/Bitcoin/comments/2sdwf8/butterfly_labs_is_the_culprit/
There you have it, BFL has once again proved itself to be the most hated company in bitcoinland. If you liked this article follow us on twitter @btc_feed and do not forget to subscribe to our newsletter!
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