The Federal Trade Commission filed a complaint against Butterfly Labs, alleging that it charged customers for Bitcoin mining machines (BitForce) and then failed to deliver them until they “were practically useless, or in many cases, did not provide the computers at all.” Over 20,000 customers did not receive the BitForce computers they had purchased.

The FTC further alleged that Butterfly was using the machines personally before delivering them to the customers who had purchased them.

According to the settlement, Butterfly is prohibited from taking up-front payment for Bitcoin machines or any other products used to mine virtual currency, unless they are delivered within 30 days of purchase.

Although the monetary judgment against Butterfly Labs totaled $38,615,161, the payment was suspended due to inability to pay. It is required to pay $15,000, and the rest will be paid if it misrepresented its financial condition.