May 11 2013 I was reading through BitPay's Terms of Service:
http://web.archive.org/web/20130415014112/https://bitpay.com/termsBitPay Terms of Service
You are independently responsible for complying with all applicable laws in all of your actions related to your use of BitPay's services, regardless of the purpose of the use. In addition, you must adhere to the terms of this Acceptable Use Policy.
Prohibited Activities
You may not use the BitPay service for activities that:
1. violate any law, statute, ordinance or regulation
2. relate to sales of (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety, (b) drug paraphernalia, (c) items that encourage, promote, facilitate or instruct others to engage in illegal activity, (d) items that promote hate, violence, racial intolerance, or the financial exploitation of a crime, (e) items that are considered obscene, (f) items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction, (g) certain sexually oriented materials or services, or (h) ammunition, firearms, or certain firearm parts or accessories, or (i) ,certain weapons or knives regulated under applicable law
3. relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other "get rich quick" schemes or certain multi-level marketing programs, (c) are associated with purchases of real property, annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card, (d) are for the sale of certain items before the seller has control or possession of the item, (e) are by payment processors to collect payments on behalf of merchants, (f), are associated with the following Money Service Business activities: the sale of travelers checks or money orders, currency exchanges or check cashing,or (g) provide certain credit repair or debt settlement services
4.involve the sales of products or services identified by government agencies to have a high likelihood of being fraudulent
5.violate applicable laws or industry regulations regarding the sale of (a) tobacco products, or (b) prescription drugs and devices
6. involve gambling, gaming and/or any other activity with an entry fee and a prize, including, but not limited to casino games, sports betting, horse or greyhound racing, lottery tickets, other ventures that facilitate gambling, games of skill (whether or not it is legally defined as a lottery) and sweepstakes unless the operator has obtained prior approval from BitPay and the operator and customers are located exclusively in jurisdictions where such activities are permitted by law.
Violations of the Terms of Service
We encourage you to report violations of these Terms to BitPay immediately. If you have a question about whether a type of transaction may violate the Terms, you can email BitPay's Compliance Department at: [email protected]. Seeing that I decided to send them an email:
Hello,
I am writing because I have just now looked at BitPay's Terms of Service and a part of it intrigued me:
Prohibited Activities
You may not use the BitPay service for activities that:
[...]
3. relate to transactions that
[...]
(d) are for the sale of certain items before the seller has control or possession of the item
As it is widely known, since 2011 Butterfly Labs has been selling a lot of products they were not in possession of, and continues to do so (they are now accepting pre-orders for 50 GH/s miners). One of they payment options they accept is Bitcoin through BitPay. One of the products they were accepting pre-orders for was supposed to be delivered in November 2012. It turned out they only managed to build a prototype but... in April 2013 (!). Ever since the first product they released (the Butterfly Single) the money they accepted was for covering the research and development involved in manufacturing the product before it was sent up to a year later. There are plenty of threads and posts on bitcointalk forum, BFL forum, their fb page, twitter, etc. of customers' (to put it midly) dissatisfaction.
I would like to ask what prompted you to associate with these individuals and at the same time keep this kind of ToS?
Regards,
malevolent (Bitcointalk.org forum member)
I haver received no response but today I noticed that the
Terms of Service have changed. Having received no response I decided to post here maybe they will respond.
I think we all know why they wouldn't end their relationship with BFL and break their own ToS rules - Butterfly Labs must be the biggest merchant they serve = the most $$$ from sales.
http://bitcoinmagazine.com/bitpay-breaks-daily-volume-record-with-butterfly-asic-mining-release/If we assume BFL took $10M worth of orders, 0.99% fee means almnost $100k.
Everyone in the Bitcoin community knows what kind of a fuckup company BFL is, so I believe given the Terms of Service they have set up, they should have stopped doing business with BFL.
Instead they only adjusted the ToS but it doesn't exonerate them from months of hypocritical behaviour - on the one hand the ToS suggests that they would care how BFL's customers are treated, and on the other hand they didn't give a damn so as long the merchant they served resulted in them earning a lot from fees.
What's interesting the new ToS still suggests that they should end the business relationship with BFL.
Our Right to Reject. We reserve the right to decline to process a sale if we believe that it violates these Terms or would expose you, other merchants, purchasers, or other parties to harm.
Note: In no way were I ever affliated with BitPay or BFL, nor have I been their customer, just pointing out gross inconsistencies and hypocrisy.
