Sonny Vleisides (right), is Butterfly Labs’ cofounder and largest shareholder. A federal judge told him in January 2014 that there was a “strong smell” of fraud with respect to his company.
A new order issued by a federal court in Kansas City on Thursday has effectively extended a temporary restraining order set down earlier this month, leaving Bitcoin mining rig builder Butterfly Labs (BFL) under the control of a court-appointed receiver. The order does allow for “limited operations” by the company, however.
For the last 15 months, Ars has followed BFL as it has gone from being a curious hardware startup in a nascent industry to becoming the target of a federal investigation brought by the Federal Trade Commission.
The FTC believes the three named members of the company’s board of directors—Jody Drake (aka Darla Drake), Nasser Ghoseiri, and Sonny Vleisides—spent millions of dollars of corporate revenue on non-corporate expenses like saunas and guns while leaving many customer orders either wholly unfulfilled or significantly delayed.
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