Topic: Those who are Spamming the trust system. Action needs to be taken! - page 2. (Read 10593 times)

We are investigating the marketing and advertising practices of the company 
BF Labs, Inc., which does business under the name "Butterfly Labs". We have received 
reports that Butterfly Labs, based in Leawood, Kansas, has accepted orders and full 
pre-payments from consumers for Bitcoin mining hardware, yet failed to deliver the 
specialized equipment as promised. 

Bitcoin

Butterfly Labs manufacturers and sells Bitcoin mining hardware. Bitcoin is a 
peer-to-peer payment system and digital currency. Bitcoins are created by 
"mining", a process where miners receive transaction fees and newly minted 
bitcoins in return for verifying and recording payments into a public ledger. 
By design, mining is a computationally intensive process which today requires 
ASIC-based hardware to be cost effective. 

Consumers who ordered and paid for Butterfly Labs equipment, yet failed to 
receive it by promised dates, are not just out the amount of money paid to 
Butterfly Labs. Because the computational difficulty of Bitcoin mining increases 
over time, by the time consumers receive the equipment, if at all, often the 
equipment has become worthless because mining with the equipment has 
become economically unviable.

If you have paid for Buttery Labs equipment, yet failed to receive your 
order or failed to receive it by the promised time, please contact our office 
using the form below.

The FTC complaints come from locales as diverse as Estonia, Argentina, Redding 
(California), and Winnipeg (Canada). They all tell a similar story, describing orders made 
that were either never fulfilled or refund requests that were denied or not processed. 
Ars has made the full spreadsheet—complete with redactions made by the FTC—available 
here. An example of one complaint, from a customer in Orlando, is below:

I placed two orders for advanced computers on Feb 2nd 2013 for over $60,000 worth of computers. These 
computers are designed to generate revenue online. I was lead [sic] to believe April or May would be the 
shipping dates. However they never shipped my products and I requested a refund. I was given a partial 
refund as I agreed to wait an additional month. I received half my money back, however as of October I 
still did not have my products shipped and the company was refusing to refund me the remaining $30,000 
they still owe me. Despite my [constant] requests for a refund and to cancel my order in its entirety they 
eventually shipped me a computer that was not what I originally ordered and worse yet it was broken on 
arrival and poorly constructed. I returned their broken computer and once more requested a refund. They 
still have not refunded me, they are ignoring me and I am unsure I can follow through with litigation as they 
are in [Kansas] and I am in Florida.

In total, there are 283 complaints. These begin in September 2012 and end in early 
April 2014, collectively detailing orders worth around $1 million.

Defendant BF Labs states the following for its affirmative defenses to Plaintiffs’ Complaint:

1. Plaintiffs’ claims are barred as Plaintiffs accepted the terms of their pre-order and
understood that all sales were final and that there was a backlog of orders and production and
delivery of any order may take two months or longer.

2. Plaintiffs’ claims are barred because BF Labs “FAQ” website states it reserves
“the right to handle refund requests on a case by case basis” and pre-ordered products are nonrefundable
as is clearly stated at the time of purchase.

3. Plaintiffs’ claims are barred because Plaintiffs understood that deliveries may take
two months or more after order.

4. Plaintiffs’ claims are barred because Plaintiffs expressly agreed to a pre-order
arrangement, knowing delay would be two months or longer and BF Labs was unable to make
any representation regarding the length of delay.

5. Plaintiffs’ claims are barred as the products in question are designed and
manufactured in accordance with the standards in the industry.

6. Plaintiffs’ claims are barred because the products in question underwent burn
testing for a minimal amount of time and had not be assigned to a customer order at the time of
the burn testing.

7. Plaintiffs’ claims are barred because untested products are not finished goods and
could not be customers’ equipment.

8. Plaintiffs’ claims are barred pursuant to K.S.A. 84-2-501, in that the products in
question were not identified in any contract at the time of the pre-order.

9. Plaintiffs’ claims are barred because burn testing was done to warrant the product
as fit and suitable for the purposes for which it is sold.

10. Plaintiffs’ claims are barred because BF Labs exercised reasonable care to prevent
and promptly correct any delays that Plaintiffs complains of.

11. Plaintiffs’ alleged damages request cannot be sustained as unconscionable.

12. Each and every claim contained in Plaintiffs’ Complaint fails to state a claim upon
which relief can be granted.

13. Plaintiffs’ claims for damages are barred in whole or in part because Plaintiffs
have suffered no damages.

14. Plaintiffs’ claims are barred in whole or in part based on the doctrine of election
of remedies.

15. Plaintiffs’ claims are barred by reason of Plaintiffs’ breaches or failures to perform
conditions precedent or subsequent.

16. Plaintiffs’ claims are barred for the reason that any actions or inactions of BF
Labs were economically justified.

17. Plaintiffs’ claims are barred by reason of Plaintiffs’ unclean hands.

18. Plaintiffs’ alleged damages, which are denied, were caused by intervening and
superseding acts over which BF Labs had no control or right of control, thereby barring or
diminishing Plaintiffs’ alleged right of recovery.

19. The damages claimed by Plaintiffs are not recoverable, in whole or in part, under
Kansas or federal law.

20. Plaintiffs’ claims are barred by a prior settlement and/or release of those claims or
are barred to the extent Plaintiffs have entered into an accord and satisfaction or otherwise
compromised their claims.

21. In further answer to Plaintiffs’ Complaint and by way of Affirmative Defense,
Defendant adopts all Affirmative Defenses available to it under the Kansas Uniform Commercial
Code or any other Uniform Commercial Code enacted by a state whose substantive law controls
in this action.

22. Defendant’s actions were neither the cause in fact nor the proximate cause of
Plaintiffs’ injuries, if any.

23. Defendant is entitled to the benefit of all defenses and presumptions contained in,
or arising from, any product liability act and/or Kansas Uniform Commercial Code.

24. The alleged damages sustained by Plaintiffs were the result of Plaintiffs’ own
comparative fault or any other “fault” pursuant to K.S.A. 60-258a and, accordingly, Plaintiffs are
barred from recovery or limited in their recovery.

25. Plaintiffs’ claims are barred, in whole or in part, by the equitable doctrines of
waiver and estoppel.

26. Plaintiffs’ claims are barred by the doctrine of justification.

27. Plaintiffs’ claims are barred, in whole or in part, by the doctrine of ratification.

28. Plaintiffs’ claims are barred by all applicable statutes of limitation.

29. Plaintiffs’ claims are barred, in whole or in part, pursuant to First Amendment of
the United States Constitution and similar applicable state constitutional provisions.

30. Plaintiffs’ claims are barred by the doctrine of spoliation and the failure to
properly preserve evidence necessary to the proper and just determination of this action.

31. Plaintiffs’ claims are barred to the extent Plaintiffs entered into an accord and
satisfaction or otherwise compromised their claims.

32. Plaintiffs’ claims are barred by the doctrines of repudiation and anticipatory
breach.

33. Plaintiffs’ claims are barred to the extent Plaintiffs prevented BF Labs from
performing.

34. Plaintiffs’ claims are barred based on Plaintiffs’ rejection of goods, as well as
Plaintiffs’ revocation of acceptance of goods.

35. Plaintiffs’ claims are barred by the doctrine of mistake.

36. Plaintiffs have failed to mitigate their damages, if any, or otherwise take
reasonable steps to minimize or prevent the damages Plaintiffs claims to have suffered. Plaintiffs
also, once they realized a claim existed, were under an obligation to minimize their alleged loss,
if any. As a result, any recovery against Defendant should be barred, reduced, or offset
accordingly.

37. Plaintiffs’ damages should be reduced as an offset by any amount received by any
other payment to mitigate damages.