Sonny Vleisides (right), is Butterfly Labs’ co-founder and largest shareholder. A federal judge told him in January 2014 that there was a “strong smell” of fraud with respect to his company.

Nasser Ghosieiri

Nearly 300 complaints have been filed with the Federal Trade Commission (FTC) against the Bitcoin-miner makers at Butterfly Labs (BFL), according to documents Ars received from a Freedom of Information Act request.
In its short existence, Butterfly Labs has become one of the world’s most mysterious Bitcoin-related companies. For the past year, the Kansas-based manufacturing company has faced numerous accusations of fraud. Currently, the company is battling one lawsuit in federal court with more likely on the way. But Butterfly Labs previously lost a civil case by default in Kansas’ Johnson County Court in late November 2013. The plaintiff, a Californian named William Lolli, won a judgment of more than $13,000 but told Ars that he had not yet collected the award.
And in April 2014, court documents revealed that a Kansas federal judge told BFL’s co-founder Sonny Vleisides that his company had a “strong smell” of fraud about it during a probation hearing.
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