This blog is now in archive-only mode! We have new outlets for expressing our excitement and contempt for all forms of cryptocurrency now!

You can follow us and laugh along with Bitcoin and other cryptocurrency projects on our twitter, @Buttcoin.

You can also talk with other global banking shills on our subreddit, /r/Buttcoin.

While we are officially putting the blog out to pasture, Buttcoin is not dead. We still hate you all.

The post Buttcoin is pooped. appeared first on Buttcoin Foundation.

Earlier today, while the price of Bitcoin was crashing (hence the falling Bitcoins on our site to celebrate the occasion), many users on Reddit started reporting issues cashing out with Bitcoin exchange Bitstamp.

Bitstamp – Bitcoin Withdrawal not processing in time (self.Bitcoin)
submitted 12 hours ago by PokerMarket

I have a pending withdrawal since 12 hours on bitstamp.
Usually they are between instant and 1 hour.
Anyone else waiting for a bitstamp bitcoin withdrawal?

Why are deposit confirmations so lagged on Bitstamp? (self.Bitcoin)
submitted an hour ago * by Tsuyoku_Naritai

Why does Bitstamp lag several confirms behind for incoming bitcoin deposits?
I recently made two deposits to bitstamp, and for each one, other blockchain explorers show 7 confirms more than Bitstamp. It means waiting two hours for a deposit, and wondering if their system is broken till the first confirmation shows up. I’ve had similar happen before but it seems to be getting much worse. What’s wrong with them?
Edit: and now one of them has disappeared. I advise you don’t deposit any bitcoins to Bitstamp until they have responded or whatever is happening is fixed.

Bitstamp is apparently broken or hacked. I suggest not depositing coins there till they respond. (self.Bitcoin)
submitted 58 minutes ago * by Tsuyoku_Naritai

A few hours ago I made 2 deposits to Bitstamp. After lagging 7 confirmations behind on the blockchain, they each disappeared from the incoming transactions list WITHOUT updating my balance, which still sits at zero bitcoins. No transfers or sales have been made under the account and there is no indication that it’s been compromised. Bitstamp haven’t contacted me. Coins from one of the deposits has already been transfered to address https://blockchain.info/address/1JoktQJhCzuCQkt3GnQ8Xddcq4mUgNyXEa[1][1] which I assume belongs to Bitstamp. I’ve contacted support.
Has anyone else managed to deposit bitcoins there successfully in the last hour or so? Has anyone else had an issue? (I need to go now but if anyone else has, then it’s an emergency so all please upvote this post for visibility. If not, then maybe it’s just some crazy new KYC game of theirs).

It appears the issues is that Bitstamp may have been Goxxed. They’ve sent out emails saying their Hot Wallet is having “problems” and that you should stop doing business with them immediately.

Dear customer,

Today our transaction processing server detected problems with our hot wallet and stopped processing withdrawals.

You should STOP SENDING bitcoin deposits to your Bitstamp account IMMEDIATELY as private keys of your deposit address may be lost.

Your bitcoins already deposited with us are stored in a cold wallet and can not be affected.

We will send you more info as soon as possible.

Best regards,

Bitstamp team

Looks like this crash may be because someone just stumbled upon some�very� cheap coins.

Grab your popcorn, it’s going to get interesting.

EDIT: We’ve confirmed this is real

The post Bitstamp is fucked, hot wallet compromised appeared first on Buttcoin Foundation.

What’s happened since our last installment in this series?

There, absolute proof that�BFL bought us out.�Not that it was ever ambiguous, but the�defense counsel confirms it, so�it’s officially been legally established: We were shills. Sorry about that.

Here is “Attachment O”, in which the FTC uses this article as evidence against BFL.

They�took screenshots of the entire article�for their records, which was really unnecessary. If they had asked, we would have happily sent them as many copies�as they�wanted,�in whatever format they wished, for just one BFL foam pitchfork.

But now that the most important part of the update is done, lets see what other shit got dredged up recently:

• A look at the FTC’s complaints database between September 22nd-November 18th found 33 new complaints. The complaints had the same “They haven’t shipped” and “I want my money back” stuff you’d expect from a case against a fraudster. Here are just a few choice examples:

It appears people who are spending thousands of dollars in mining hardware cannot be bothered to learn who is doing what in relation to the case. The FTC does not have the power to get the funds back, at least not now. Remember, BFL is in�trial, which includes the possibility that they win out and resume operations. If that happens, you can kiss your funbux goodbye. (Although that probably won’t happen.)

So apparently there are people still buying from Butterfly Labs, despite the warnings everywhere that this company is horrible. The box on the left is the date the complaint was logged, and the box on the right says when the customer made the initial purchase. However, in this instance, there is no date. Maybe they were embarrassed about recently purchasing product from this group?

I don’t mean to kick a guy when he’s down, but even the original, official Bitcoin site says that investing in Bitcoin is risky,�that you�shouldn’t do it unless you really�know what you’re doing (which would seem to preclude investment at all, but whatever). That includes using your tax refund to invest in, essentially, a get-rich-quick scheme. Don’t invest in Bitcoin. Don’t fucking do it! Just stop!

No, they don’t, at least not right now. We’ll get to this later.

• In the evidence above was a transcript of episode 34 of the “Lets Talk Bitcoin!” podcast, where Josh Zerlan, AKA the guy who said that BFL was using mining rigs before shipping them to customers, mentions this:

It’s not anything official from the FTC (apart from the transcript), but I just think it’s odd how he remained vague on ship dates, which was a part of the original FTC complaint against BFL. Was it mandated at BFL HQ that all ship dates be made vague, or is this just some random happenstance where Zerlan really didn’t know? And how exactly did they plan on staying competitive when they barely had any product out there? Was that their main motivation for buying sites out, or was it some kind of unexplainable paranoia? Again, not official, just questions I had reading this.

What�is official, however, is Mr. Zerlan identifying himself as Chief Operating Officer of BFL and detailing the company’s “TestNet”. Why this is in the documents is unclear, but I’m gonna speculate and say “TestNet” is where BFL used the miners before shipping these outdated machines to angry hordes, if they even got shipped.

I’m betting 0.0000001 Satoshi that he just described the size of the pre-mining operation, as well as accidentally disclosing that there was a pre-mining operation.

• Refunds! Ish. Temporary Receiver (TR) Eric L. Johnson, submitted his plan for earning cash back for customer refunds�on October 29th. Around November 4, the plan was ordered and�approved.

Butterfly Labs got a lot of its orders in Bitcoin and used BitPay to process them. The TR’s plan is to use the funds BFL got, send them to a court-held Bitcoin wallet, and eventually convert them to dirty fiat. To do this, the TR�may�hire outside help to do this, since these transactions have a history of getting stolen.

There’s also the fact that all sides MUST cooperate, probably in reference to BFL’s prior behavior that nearly landed them in a separate case because they were harassing everyone.

We did it guys! We got the US Government to take Bitcoins! Victory is ours at last!

You thought I was gonna post the Ron Paul GIF, didn’t you?

Well, anyway, assuming things go the way we all expect them to, the court will find BFL guilty, and then the FTC will start getting refunds back to people. If BFL is not found guilty, they will attempt to resume operations. That will not go well because, at this point, they’ve antagonized and driven off�everyone who would want to buy from them. Either way, BFL is fucked.

(And no court date has been set yet, probably because the trial already happened. They’re in post-trial briefings. Anyone who tells you of an impending trial date is a fucking idiot.)

CORRECTION: I’m a fucking idiot. According to commenter Curt Shaffer, the date linked to above was for their preliminary injunction, not post-trial briefings. Sorry about that. We’ll have more updates on the case later, promise.

The post Your Obligatory Butterfly Labs Case Update appeared first on Buttcoin Foundation.

That tweet, posted�five days after Benthall’s arrest, links to an address that currently has 0.34 BTC donated to it, or roughly 125 bucks. Wondering how a convicted man could get access to his Twitter account behind bars, I asked him for an interview, and provided my email address.

A few days later, Ars Technica and The Daily Dot both reported, via Benthall’s lawyer, that the account had been compromised. The day after these articles came out, a second tweet was posted:

Yesterday, November�21st, “Blake Benthall” finally contacted me. Which was weird.

First, I needed to make sure that this really was the person from Twitter. Two things confirm it:

1. The email used was “[email protected]”, the same email the FBI says he used to register servers for Silk Road 2.0.

2. Here’s the first email I got, with the subject line “Bitcoin Twitter”, from “[email protected]”, with a bit of a private message I sent to Mr. Benthall’s Twitter account:

Since this was a private message, only someone with access to the account could have read it. Therefore, I am completely convinced this is the real account.

As you can see,�this person�asked me for Bitcoins. This will be a running motif. I told him that I don’t pay for interviews and that I knew he wasn’t Blake, both because the lawyer had said so and because the email was in broken English. But even though�I knew he wasn’t Blake,�I still wanted�to know why he took over the account. Was he just trying to scam people for cash? Was he a vendor or buyer on SR with�some vendetta against Blake? Some third thing?

He responded a few hours later:

On top of the broken English, this email now has actual Russian.�The sender, again, asks for Bitcoin, then says he is a friend of Blake’s and offers me “exclusive” stuff ��presumably�from the email account, but maybe this guy got access to Benthall’s computer. Who knows? Either way, I tell him again that�it’s my policy not to pay for interviews. But I did�send him my questions.� And I got this response:

I reiterated again that I wouldn’t pay him. I haven’t heard back from him since.

So there you go. I got an email from the guy who hacked Blake Benthall’s Twitter. �Close enough! Yay!

UPDATE: Apparently, Mr. Benthall got released on November 21st. If he’s reading this, I’d like a reply sometime soon. Maybe we could start over?

UPDATE #2: Benthall deleted his Twitter account. Or someone did. Either way, the tweets above are gone. I’ll get static images up soon. Also, before the deletion, “Blake” asked me for money on Twitter for “Exclusives”. So, technically, he did get back to me.

The post The Time “Blake Benthall” Emailed Me appeared first on Buttcoin Foundation.

About 2 weeks ago I was rummaging around a garage sale (as I often do on the weekends) and found an old Dell laptop that was in fairly good condition and paid $50 for it. I’m fairly into tinkering with old electronics and such so before I reformatted the drive, I decided to go snooping. To my amazement, It had an old version of bitcoin qt on it which contained about 61 btc in an unencrypted wallet. At first i thought i was could good to be true but I was able to transfer the btc into the wallet on my computer with the help of a friend who knows way more about btc than I do. He was shocked as well. Next week I plan on selling about 1/2 of the stash on coinbase and use the money to buy a car. Am I a terrible person because i have no intention of giving any of the bitcoins back?

Now, before we continue, we should point out the following:

• 61 BTC, as of Nov. 18th, is worth $23,040 dollars, at $377.70 per BTC.
• In California, Grand Theft is when property has been taken at over $950. We’re using California as a reference, because Grand Theft law changes from state to state. Legal Match�pegs the average you’d need to steal as somewhere in the $500-$1,000 range.
• A Third Bullet Point!

But, hey! He is generous:

I did give my friend a few bitcoins for helping me out.

• That would make his friend an accomplice. Hey, that could be our third bullet point!

At this point, the Bitcoin community, who, may I remind you, loves “Be Selfish” icon Ayn Rand like no other, gave the following bits of advice:

mustyoshi

Pretty sure you’re fine legally.

But if you’re so concerned about the law, why don’t you return it? I’m sure the person would give you a portion for being a good person.

justanothershibehere

It would be a great thing for the collective if you were to take $1,000 cash, put it in an envelope and go put it in their mailbox. Anonymous $1,000 would brighten their world. Plus you just received $2x,XXX for nothing, don’t be a dick, spread the love.

The post Is It Stealing if the Vendor Doesn’t See You Take It? Part 2 appeared first on Buttcoin Foundation.

Poor Blake Benthall.

What’s a former SpaceX engineer to do when your favorite drug buying marketplace, Silk Road, goes under? Do you possibly risk going outside, into the real world,and interact with other people?No, of course not. You start a new drug empire and invite an FBI informant to be your number two on the very first day of operation.

And that wasn’t even the dumbest thing he did during the rise and fall of Silk Road 2.0.

Blake Benthall is software engineer living in San Francisco. He worked for SpaceX for a few weeks before quitting. He went to the University of Florida, bounced around a few startups, ran a tech incubator from his house, helped create a project to bring Linux to the iPod, was an eagle scout and took some awkward pictures with his very unfortunate forehead. By all accounts of what we can see, it was your average Silicon Valley engineer, fuckingaround and disrupting whatever industry he happened to bump into.

Let me play you song of my people (privileged 20-something white males living in the Bay Area).

According to the FBI’s criminal complaint, Blake seemed rather upset that the original Silk Road has closed down and wanted to be part of the team that rebooted the old code into a new incarnation, dubbed Silk Road 2.0

Here are the timeline of events of how Blake came into power at Silk Road 2.0:

• October 2nd, 2013 – The Silk Road online drug marketplace is shutdown andRoss William Ulbricht, A.K.A., Dread Pirate Roberts, is charged in federal courts of being an enormous shithead.
• October 7th – A discussion forum is set up for discussing how to re-open Silk Road. A man calling himself Dread Pirate Roberts publicly claims he’s not THAT DPR and he’sextending an offer to all the other drug dealers and vendors of the old Silk Road website to set up shop and the new Silk Road 2.0
• October 8th –THE NEXT FUCKING DAYDPR2 gives the FBI informant moderator access to the forum and control over hidden parts of the site. The entire operation is compromised before the site is even launched.
• November 6th – Silk Road 2 goes live and there is much rejoicing. DPR2 is still the admin at this point.
• November 13th – Blake Benthall, who goes by the super lame handle “Defcon” (and commonly called “Defcunt” by the other admins) gets added as a site admin. His mom prints out his forum profile and puts it on the fridge because she is so proud.
• December 20th – 3 admins from Silk Road 2get their asses hauled to jail and have federal charges files against them. DPR2 realizes what a stupid idea this was and bails on the entire operation. Blake sees this as his moment to shine! In fact, one of the admins even posts a warning that law enforcement must have infiltrated the site and to remove all coins immediately. Blake decides to reassure everyone that everything is OK.

• December 22nd – Blake decides to massively inflate his e-peen by publicly posting the SR2 forums that as the second in command he’ll be steering this ghost ship.
• December 28th – Blake says that he’s the new sherrif in charge. He promises to literally put his life’s work into this compromised illegal drug empire and formally removes any doubt whatsoever of what his role in the site would be.

From this day on it’s Blake Benthall’s site to run. And he runs it terribly. The FBI document is light on details on how exactly the FBI gained control of the servers, but since the FBI informant was forum admin since the first day we can imagine it wouldn’t be terribly difficult to find where the servers are. In fact, there’s a lot to parse in this document but for this article we’re just going highlight just how bad a job Blake did of trying to cover his tracks.

When the server was ultimately located in another country the FBI had the local law enforcement make an image of the server. While the server was down for imaging, Blake posted a message in the forums noting that he was aware of the downtime.

After inspection of the server, they located chat logs between Blake and DPR2 that carefully explained the handoff of admin duties.

The interaction between Blake and his ISP that hosted the server seems to hold the majority of the evidence against him. Because he was a colossal idiot, he used Tor and hid his tracks quite well when interacting with the Silk Road 2 website, but when it came to any other interaction with the host or management activities he did zero to cover his tracks.

He didn’t use Tor to submit support tickets complaining about the server outages and alsoused an unusual combination of abeta browser and an out of date OS.This was easy to match up the site visitor information tohis laptop..

He accessed the customer support from ahotel wifi over clearnet. He also registered the room withhis real name.

And tweeted about being at the hotel the day before.

But the most idiotic, moronic, stupidest thing he could have done was register the server usinghis own vanity email address.

Not only that, he sent private messages from the Silk Road 2 administrator panel to his personal account, removing any doubt that the owner of email account also knowingly controlled Silk Road 2 servers

All this while he was urging the vendors and users to use stronger encryptionand the site adminswere helping to lower the risk of FBI honeypots

When they did eventually catch up to Blake the trailed him at his house and matched up “Defcon’s” available/away timeouts with his time spent at home.

BONUS: Remmeber that guy that bought a Tesla with Bitcoinslast year? It was probably him too.

At this pointyou would think that Blake Benthallis the dumbest drug kingpin you’ve ever seenbut in one last ditch effort to surprise everyonehe opens his mouth and throws away his only bargaining chip.

In court, federal prosecutor Kathryn Haun said that Benthall was likely to flee and should not be released. “He was found with over $100,000 in cash at home,” Haun told the court. “He has a passport. We’re not aware of whether that was secured. In addition to all of the detail, Mr. Benthall did admit to everything after receiving his Miranda rightsthat he was the administrator of Silk Road 2.0. Our principle basis is flight risk at this point.”

…

His attorney, Daniel Blank, a federal public defender, said that he only met his client for the first time in court on Thursday.”You could fill a large volume with what I don’t know,” Blank told reporters after the hearing.

Prosecutors also reportedly found a laptop filled with customer and vendor information, stored unencrypted

After raiding his home, the FBI says Benthall’s PC (which was not encrypted in any way) had full “address lists for customers all over the world that will be of significant interest to many global law enforcement agencies.” Prior to the raid, the U.S. DEA made purchases from the Silk Road 2.0, including heroin, cocaine, LSD and Oxycodone. Each was then tested and all tested positive for illegal drugs.

Ladies and Gentlemen, Blake Benthall, chief dumbass.

The post Blake Benthall and the Terrible, Horrible, No Good, Very Bad Day appeared first on Buttcoin Foundation.

I want you to read the following block of text without thinking about how well your day is or isn’t going. This will induce spastic cringes so powerful your sleep apnea will be cured.

The title of this Reddit post is “I just forced a business to accept bitcoin whether they wanted to or not.” The author is unknown, since, as you can see in the picture below, the [deleted] tag is where the name would be (We think its this guy), presumably after the negative shit he got from this post. Here’s the full text:

So today I took my kids to the pumpkin patch. It was a family farm and there were about 100 kids there. So it was nice, kids found their little pumpkins and were happy. Then I go to pay. Well I waited for 15 minutes, but nobody came to take my money. I walked to their house and there was a phone number there to call if nobody was around. Called it twice, left a message. Still nobody came out to take my money. I waited a total of 35 minutes and I don’t believe in stealing, but I’m not about to sit in a car for 30 minute car ride home with a 3 year old and 5 year old screaming at me as to why I left their pumpkins there, so I took them without paying.

Got home, found the farms email address and emailed them payment in bitcoin from coinbase. If they accept bitcoin next year, I’ll go back and buy more pumpkins. If not, fuck them, they will probably be out of business anyway since nobody was manning the register for a full 35 minutes(or longer)

Just in case there was any doubt, here’s the original post.

There are many things fucked up about this story. Here’s a short list, and feel free to add in the comments below if I missed anything:

1. Has this guy never been to a restaurant with a shitty waitress, and, instead of waiting for her to take your card, you just went up to the front desk and paid the guy at the register? There are ways around the problem of no one manning the register. One Redditor commented

brycey06
they didnt have a mailbox you could put your money through?

He could have just left the money there, as well. I don’t think anyone would steal the cash, especially if the guy had left a note saying “You weren’t here, I saw a price list, here’s your money, Love, Dave” or something. But if you think it might have been stolen, he could have left the cash in some odd nook and�cranny, and emailed them to say�”You weren’t there, the cash is behind the rosemary” or whatever. There are multiple ways to be a good person.

2. What the hell were his kids doing this whole time? He said he waited 30 minutes. During that time, were the kids with him? If so, did the kids see Dad here steal the pumpkins? What the fuck kind of example is that?!

pm_me_pasta
Good example to show your children.

“No one’s here so we’ll just steal the pumpkins, kids!”

You could have made this a lesson in ethical behavior that they would have remembered. Oh well.

This guy is right. You could have tried to pay and taught your kids “This is the right thing to do”. I thought that’s what you libertarian and/or Freeman of the Land types were all about: Integrity, respect, honor, pulling yourself by your bootstraps, etc. You threw your battle-hardened ideals out the rear window for some pumpkins? The fuck kind of movement is this?

3. The farm did not accept Bitcoin, yet you paid in Bitcoin. User “pm_me_pasta” summed it best:

pm_me_pasta
Couldn’t agree more. From the farm’s point of view:

“Hey mom and pop pumpkin farm, no one was attending your register so I helped myself to some of your stuff. Don’t worry I’ll pay you later in Japanese yen.”

Assuming this is a working farm, they don’t have time to figure out what a Bitcoin is, let alone get payment for it. I know CoinBase, its where I keep my BTC that I have no idea what to spend it on, but sending and receiving payment are two completely different experiences.

If your sending, say to your bank account, it takes me 3-5 days to get it transferred. If I’m sending it to Silk Road to score some smack, its 10 minutes. If your sending it to that farmer, he has to set up a CoinBase account, then his bank info (With Routing Number, Bank Number, Account Number, etc.), then wait for the bank to be verified, which can take 2 days for them to do that thing where they send you some pennies and you see what the exact amounts were. Then converting it from BTC to USD takes 3-5 days.

That’s 7 days to receive payment. YOU COULD HAVE JUST KNOCKED. Which brings me to my next point.

4. WHY DIDN’T YOU KNOCK? There was 100 other kids there, it was a well kept family farm. You mean to tell me you went to one spot and waited for half an hour, and that’s it? I understand, they should have been there, that is a point against them, but they had to have been somewhere! Its a family farm! Go to their front door, they won’t mind you bothering them! Your giving them money! And even if you are bothering them, like they’re having a family emergency or something, you ask where you can leave the money. Or your just leave the money by the register with a note of what you took. Or you leave without pumpkins, and tell your kids you’ll come back later. But you don’t steal! Why the fuck did you steal the great pumpkins?!�Did Linus put you up to this?

“Did you get the pumpkins, lil’ bitch?”

5. There was a phone number, you called twice and left a message. With all we have established, you could have, from that point onward, been polite enough to say in the message anything we have suggested here. But assuming your a smart guy, which, from what we’ve seen, you aren’t, there is another option: Just leave.

Leaving could have fixed two problems:

1. I wouldn’t have had to have written this!

2. Your kids could have learned a lesson.

But you didn’t want to waste gas! That’s why you stole, because your kids were miserable without the pumpkins!

Your kids went to a farm with “a hundred other kids”, had a blast, and might have a great memory of their dad getting them some pumpkins to carve later. But when they find out�that you stole them, that memory is going to be tainted.

The reason we think user “peilthetraveler” is the original poster is because of this comment:

peilthetraveler
Yeah, probably should have just left the pumpkins, I would’ve had to suffer with 30 minutes of screaming kids, then I would’ve got home and been so pissed that my time was wasted i would’ve got on yelp and dragged their name through the mud, plus since its a small town, got on facebook telling everyone how bad the customer service was, cost that farm hundreds of dollars worth of business(maybe more because once I told everyone there was nobody manning the cash register all the “real” thieves would’ve come out of the woodwork to get the easy pickin’s) and then we all suffer greatly.

At least my way, they got their money, my time and gas wasn’t wasted for nothing and kids are happy. It was the lesser of 2 evils.

This guy makes it sound like he’s in control of everything here: If he does get his way, the kids love him, he didn’t waste his gas, and they have pumpkins, which kids love, cause its like legal stabbing.

If he doesn’t get his way, though, no problem, since he can do a negative review on Yelp and cost them hundreds! Then go on Facebook! And then we all suffer greatly, cause where else am I gonna steal pumpkins next year! I’m such a sadist!

“Bend over.”

Also, he implies that if he had bitched about the farm and its lo 30 minutes+ of unmanned register control, the “Real Thieves” would steal straight from the unmanned register, because that’s a thing that happens.

2 points I want to make here:

1. You stole. You may pass it off as “I paid in Bitcoins, whether they like it or not”, but they don’t accept it. Like I covered earlier, its hard to get that money if you’ve never been set up to accept Bitcoin before. And to any business, revenue is important. So they have lost money on you taking product, ergo, you stole. You had 30 minutes (Or longer, since you weren’t being rushed) to put money down, and you didn’t. You can claim “Bitcoin!” until your blue in the face, but meanwhile the farmers you stole from are�out whatever they charge (Lets say $5 a pumpkin), which does add up, over time. To offset that, they may need to charge extra on a few other units, because that’s how stores offset the costs of stolen merchandise.�You robbed them, and they’re the bad guys?

2. When I said earlier “Just leave the money on the counter with a note”, I mean that. No one is going to steal that money. There’s 100 loudmouth kids there. Assuming they didn’t all get there on their own in a massive horde of toddlers, their parents are there. And the average Joe that would take their kids to a pumpkin patch has enough moral lessons and ethics to see a note on the table or just cash and not take it. The only people who would do that are lowlifes who steal. And, as we have seen in point one, that’s you.

This guy�had no control here. He took the worst possible avenue. And things weren’t going to go that horrible “I’m going to post on Yelp, and I hope they lose $10 billion trillion quadrillion dollars because I had to wait for 30 minutes while they milked cows or something” direction either, because it doesn’t work.

When Amy’s Baking Company was on Kitchen Nightmares, its Yelp rating was one of the things they bitched about the most. Its what got them on the show. Yet look at it now: 3 star rating. Its never been a question of it being a shitty place, its not. It looks nice, the food is decent at worst and fantastic at best. Gordon Ramsey said it was a pleasure to be there when he did his inspection of the place. The problem wasn’t the food, it was the owners shitty attitude and behavior! And yet, despite the beating they got, they’re still open. That is one of the worst examples of Yelp being used to “Take down” someone, and they’re still fucking here. If the whole fucking internet, with all its lethargic muster, couldn’t bring down Amy’s Baking Company, then you can’t bring down “Fuckin’ Pumpkin’ Inc.” because they weren’t there to complete a transaction. And, again, your the asshole here, because your the one that stole.

6. What the hell possessed you long enough to get onto Reddit and brag you ripped off a family farm. Did you seriously think that was going to go well?

In the words of Bill Maher:

“I can’t even think of a suitable analogy for that disconnect. Its like thinking getting a handjob will clean your garage”

Those are just some of the quick thoughts I jotted down. If I missed any, let me know below, so I can steal them and update this article pretending they are my own.

The post Is It Stealing if the Vendor Doesn’t See You Take It? appeared first on Buttcoin Foundation.

Cigarette Smuggling: Its not just the thing your cool Uncle did for you in high school (besides letting you watch scrambled porn in his wood-paneled den). It is a huge, ever growing, worldwide industry that you probably didn’t even know was a thing. Not that its your fault: in the United States, anyone�18 or over can get them, pretty much anywhere, and turn their lungs into ash (you still can’t legally get fucked up on wine coolers, though). How bad could it be?

Havocscope puts the worldwide illegal cigarette smuggling trade at $50 Billion, with $10 Billion in the United States alone. Or if you’re in the tech industry, that’s 10 Instagrams!

How?! How is something that is legal pretty much everywhere (Sans smoking bans in specific places like bars, restaurants and Idaho) make so much money?! How could Boston be in a situation where it is selling a legal, regulated product, and yet 40% of the cigarettes sold there are black market? In NYC, the rate is estimated to be as low as 48%, and as high as 60% , bringing yearly losses of $419 Million dollars for the state. How does a regulated product you can buy pretty much anywhere bring about such a huge loss? More specifically, who would Ron Paul blame for all this?

The answer is simple: Taxes. People buy smokes from “Alternative sources” (Reservations, states with lower taxes, the kid behind your old high school{go lions}) to avoid paying whatever the higher tax is in that state. See, here’s the thing: Each state has its own special tax on cigarettes. Some states have the infamous “Sin tax“, or that thing old people believe discourages other people from doing things that are bad for them, like drinking, smoking, masturbating, and buying junk food, thus�driving the price of that thing up (It doesn’t work, by the way).

So how does cigarette smuggling work? First, you get smurfers who will run to pharmacies around the state Well, as the Boston Globe explains, in places like Boston or New York (which, thanks to sin taxes, have put historically high taxes on smokes), smugglers will buy from either Native American reservations/factories on their land wholesale, or from states with lower taxes, like New Hampshire or Pennsylvania (Pennsylvania accounts for 60% of smuggled cigarettes in the US).�They then get them to the states with higher taxes. In Massachusetts, if you get caught with under 12,000 packs, its 1 year in jail. Over 12k packs, and its 5 years. Both penalties have fines up to $5,000. Meanwhile,�A Washington Post article from 2004 said that a whole truckload of cigarettes could net $2 Million off 800 cases, or 48,000 cartons. (Adjusted for inflation between 2004 and now, that $2M is more like $2.5M.) Bloomberg says that in the Carolinas, a load of 200 cases headed to New York can net almost $500,000.�So some people are seeing the $5K fine vs. the $500,000 profit, and are saying “Eh, who gives a shit.”

The difference for consumers is generally half the price of legal cigs. In New York, a legally bought pack of cigs can cost $13, whereas a smuggled pack can cost $6.

This sounds like an industry ripe for disruption (God I feel dirty after saying that).

Enter DutyFree, a company�with a beautiful website and a dirty job. They claim to have been in business since 2009, and their (self reported) stats are staggering. Just look at their front page:

Their claims are as follows:

-They�have saved consumers $3,440,000.
-They have sold 76,500 cartons.
-They can keep the cost, per pack, at around $4. (However, when you buy from them, its a carton. 1 carton = 10 packs = 20 Cigarettes per pack, on average.)
-They sell major brands, like Marlboro, Winston, Camel and more.
-BONUS: TAXES R THEFT!

They’re like Dollar Shave Club, only if Dollar Shave club was selling a heavily regulated, cancer-causing product illegally! Yes, this is illegal too, we’re not advertising them so you can get your smokes for free! We’re saying they’re going to jail soon! How? Lets explore:

On their FAQ, the VERY FIRST question is “Who are you and can I trust you with my money”. Their answer includes the fact that they sell on Silk Road, the Libertarian utopia where you can get drugs sent to your front door, as well as other hidden service marketplaces. This was Silk Road slightly over a year ago:

“Yeah, we used to sell there, but then it got shut down by THE MAN.”

Silk Road was shut down once (A second iteration has been running for a while now) for being a drug trafficking site, so the fact that they “Proudly” sell on there is a pretty big red flag.

The whole site is a giant red flag. That’s why everything here is red.

Now, lets go through all the laws they’ve broken so far:

–The PACT Act, a law that was signed by President Obama in 2009 to make the sale of cigarettes illegal online. This buinsess is tailor made to be a “Fuck You” to this law. If they’re caught, that’s a year in jail and their money gets sent to the Postmaster General to help fund operations finding this shit in the mail.

– The�Contraband Cigarette Trafficking Act of 1978�makes it illegal to sell over 10,000 cigarettes in a single transaction. The penalty is 3-5 years. We’ll go with 5, since they’re blatantly advertising how many cartons they’ve sold (75,00 cartons, or, at 200 cigarettes per carton,�150,00,000 cigarettes sold.)

–Being on Silk Road or any other marketplace is tricky. When Nod was arrested, he was charged with Conspiracy to Distribute Cocaine, Heroin and Meth, a violation of�Title 21 USC�841 (a)(1) and (b)(1)(C), and Title 21 USC 846�(Note that he was only charged on one count, despite there being 2 violations.) Yet Silk Road users could also be charged because each sale brings a commission that goes to SR’s management, ie financing a criminal enterprise. There’s also SR’s tumbler feature which mixes BTC to make it untraceable (However, since SR2’s�massive loss earlier this year, I believe they’ve stopped this and rely on 3rd party escrow), which is definitely�laundering�(I say definitely because its a major piece of evidence in the Ross Ulbright trial). Its tricky, but in the end, Nod’s crime would net him 10 years, minimum. Laundering cash is either giving all the money you laundered back, or a $10,000 fine. Between the two, that’s an extra 10 years + $10,000. In USD, not Buttcoins.

Total so far: $10,000 fine (Again, in USD, not Butts), and up to 15 years in jail.

Now how does this tie into BTC? Its all they take. They had bank accounts, but they were frozen. And, like any legitimate business, they have an excuse:

Why would banks ever hate doing business with shady overseas criminals? They’re just holding the money, right?

What happened before was THE MAN froze their accounts, because this is clearly illegal. But now, with Bitcoin, they are unstoppable! No one can find them, because they’re so secure, with their 256-AES encrypted digital money and that’s it!

Except their website is on the clearnet, or the internet everyone knows and loves, and not hidden away like on a Tor hidden service. You know. Easier to find. And with that, easier to see who bought what, when, where it was shipped to, etc. But, hey, you saved $20 bucks this year! Thanks, Reddit!

Also, focus on that last bit. “We’re pretty proud to be introducing new people to this great currency, people who wouldn’t bother buying it otherwise.” This is a pretty big problem with the Buttcoin proselytizers: they are their own worst enemy when it comes to advertising.

You actually think introducing people to the currency of the future through an illicit market is really the best way to get new cult members? Do you actually think that if there was someone who had no idea what Bitcoin was, the best way to introduce them to said �”Currency of the Future” would be through a service hawking illicit cigs? Because, bear in mind, a survey done in February 2014 said that 76% of Americans are not familiar with Bitcoin, and 79% have no desire to ever use it. Bloomberg reported that 6% of their respondents thought Bitcoin was an Xbox game; another 6% thought it was an iPhone game. 80% of respondents said they’d rather have gold, because at least it has value. Worst of all, 38% think that Bitcoin has hurt the US dollar! Its unfounded, but that’s not the point. The point is the public, by and large, thinks of Bitcoin in a negative light, and to be “Proud” of introducing people to it through a shady service like this only cements that idea in their head! How the fuck do you not get this?!

Lets move on to other examples of how stupid they are. On each cigarette package, there’s supposed to be an excise stamp, or a label�that lets the government know that specific product’s taxes (usually tobacco and alcohol) have been paid for. Usually, smuggled cigs don’t have that label on it, so its easy to identify which ones are legal vs. illegal. Our Canadian friends�might recognize this label:

This is what a Canadian Excise Tax looks like, with all the details pointed out. Here’s one�you might see in a Canadian store:

Here’s what they put on cigarettes in Pennsylvania:

Like all things from Pennsylvania, its simple.

See the main connection between them? No? Well, look at one sold by DutyFree:

Oh, yeah. It’s in fucking German.

In their FAQ, they say all their shit comes from Europe. BUT THEY PAY EXCISE TAX!!! YOU CAN VERIFY IT!!!

Except one thing: Excise tax in the US and Canada is usually in�English. Also, the packages are in English, too. I seriously doubt anyone is selling imported Marlboro’s from Moldova just because they like the packaging. Its the same shit. The difference is the countries, and that difference can equal 15 years in jail and $10,000 to THE MAN. Even if you are paying excise tax, and the label is on it, it doesn’t matter, because once it gets stateside, its clearly not the pack you find at EVERY STORE EVERYWHERE.

In fact, putting excise stamps is probably a detriment, because you can really only get official stamps from those specific countries. So buying from these guys is:

A) A guarantee you’ll get a visit from either the cops, the IRS or the ATF for evading taxes/buying drugs from�overseas. And when they see the Moldavian excise stamp on your package of Ukranian cigs, they will use that against you in court.

B) A Complete and total guarantee that “A” will happen, because its a clearnet site. They will be found, and you will be found through them. Silk Road was supposedly 100% anonymous, but they had CAPTCHA’s that exposed their IP address anytime it was used. The CAPTCHA was a clearnet product. This is too, and they will be caught because of it.

C) A clear indication that you’re a cheap fuck, because you refuse to pay taxes over here and instead pay a little less to help al-Qadea.

Oh, I forgot that shit. The main reason the government doesn’t want people buying smuggled cigarettes is because terrorists are using the revenue from this to buy God knows what!

And, yeah, we get that “Terrorism” is a convenient excuse for anything in the media this past decade, but how about the fact that the IRA, Hezbollah, the PKK, CNDP and FARC have all used it for funding their campaigns. This isn’t the Fort Dix incident; these are serious groups doing real harm, and they’re doing it, in part, with funds from cigarette smuggling. That’s why its important. But now you can get cigarettes with Bitcoin, so all that goes out the window!

For a group as fervent as Bitcoin aficionados, they sure do throw their values and common sense out the window when another thing they could buy with cash becomes available for their internet dollars.

Were not saying these guys are propping up terrorists by selling this stuff, but at the same time, we have no idea who they are! If you look at the first FAQ question from before, you see a link that says “OTC web of trust”. This is what pops up when you click on it:

Blazedout419 is a guy I can trust!

To be fair, they seem to be clean and have actually sold product. And its really not fair to accuse them of funding terrorism, when clearly all they want to do is not pay insane amounts of taxes on a product they love, using the currency they love. Its kind of sweet, actually. Love knows no bounds, and this time its going to get a bunch of people arrested and fined. And because they accept Bitcoin, they will never�be blamed for running an illegal business. They’re merely helpless victims sitting on piles and piles of cash.

But at least they have shipped their product, making them slightly better than Butterfly Labs.

The post Buttcoiners Becoming Buttleggers: How One Cigarette Smuggling Operation Will Get Everyone Involved Arrested appeared first on Buttcoin Foundation.

The Federal Trade Commission filed Case �4:14-cv-00815-BCW� on September 15^th, 2014. In their report, the FTC claims that BFL did a bunch of dumb things.�These include:

–Refusing to refund payment, by flipping between two policies: No refunds, and refund offers that were never fulfilled.
–Josh Zerlan, Vice President of Product Development, testified�that BFL used pre-paid rigs to mine for BTC before shipping (if they were even shipped). This may explain why some were broken messes by the time they got to customers.
–Because the products were shipped so late (or not at all), the rigs were incredibly outdated, and because of that, miners couldn’t use the rigs properly. �(Via FTC):
–Refusing to ship the BitForce miner months after pre-orders, then using deceptive marketing to get people to buy or upgrade to a newer miner, the Monarch.

For these reasons, primarily, the FTC had temporarily shut down operations at Butterfly Labs (From what I understand, some operations have since resumed after a TRO elapsed. More on that later). The FTC has said in their later report:

Given their record of repeated law violations, Defendants [Butterfly Labs] cannot expect the Court simply to take their word�for it that they have abandoned their illegal conduct for good� Defendants� business survives upon income obtained through misrepresentations about timely delivery and profitability that�should be returned to their�victims…�[The] Defendants have failed to explain why the Court should�permit them to resume operations and deplete assets available for consumer redress, especially in light of the Commission�s likelihood of success on�the merits. (Case�4:14-cv-00815-BCW�Document�42)

Yeah.

About that last bit, the �Success on the merits� part. As detailed earlier, BFL is fucked. The FTC has multiple points (and evidence) on BFL�s deceptive practices that are quite compelling. These include:

–BFL admitting that they were behind schedule, while using vague terms that didn’t set a firm ship date. Like, openly saying �Two months or longer� to consumers. Which is not considered “Qualifying language”, AKA �Not some vague bullshit�. BFL later admitted that, with Bitcoin mining, �Time was of the essence�. They ended up never shipping most of their orders, and the ones that did ship, as mentioned earlier, were outdated due to the difficulty rate constantly increasing. That basically means that because the miners weren’t delivered on time despite the company admitting that, in order for their product to be competitive, it had to be operational ASAP, the rare few who did receive their broken, piece of shit machines could not recoup their costs and, therefore, lost a ton of money.
–That stupid calculator they put everywhere, stupidly. (More below)
–The language used to explain shipping delays specifically was �Feeble�, and any excuses they use are bullshit because they clearly were not shipping anything or being reasonable in the meantime.
–They lied about testing the Monarch chip, saying it was nearly finished with “Taping” when, in fact, it was barely even beginning, with internal messages saying to expect shipment in early February 2014. This was November 2013.
–Around the same time they were panicking about the Monarch chip not being close to done, they sent an email blast promising early 2014 would be the ship date. This is, again, vague, not qualifying language, and also�deceptive marketing, because it is claiming that a product that is not close to being done is close to being done, and pre-orders are open now! What a great source of revenue: people trying to jump into the mining game not knowing that BFL was supposed to ship that product months earlier!
–They claim to have a full refund policy for orders between August 9^th-November 9^th, 2013. Hilariously, they have no documents proving this, making this one of, if not BFL’s�most blatant lie when you realize the FTC had to consult �The Blogosphere� to see how customers had to force refunds via Credit Card disputes or lawsuits. The main thing from all of the comments in each thread is simple: BFL did not willingly refund a single damn order, probably in part to their confusing refund policy explained earlier. We’ll call it “Kafkaesque”.
–Later on, they allowed consumers an option to upgrade their order without disclosing that by doing so, they would void their opportunity to get a refund. That is illegal, since you have to notify consumers when you change details like that. Its why you get an email from eBay or PayPal or Tumblr saying “Our Terms of Service have changed”.
– By the FTC�s count, BFL had 3 major products that did not ship: BitForce, Monarch and their Cloud�Mining�service that charged $10/GHS using their Monarch miners. Yet they still advertised new products and accepted pre-orders.
–Not one BFL consumer, not a single one out of 20,000 paid-in-full consumers, got a BFL miner on its original ship date. And even if there was a reasonable delay, since this is supposedly very high-tech stuff were dealing with here, and delays do happen, BFL still has literal tons of Monarch orders left to ship almost a year after the original ship date. That’s unreasonable for any company with orders paid-in-full.
–Those stupid �Y U NO SHIP� pitchforks from our last article on BFL? The FTC sees that as the company mocking their customers. And it�s kinda hard to deny.

Nothing says “We love our customers” than using funds that should go to shipping a product instead going to mass ordering foam pitchforks and torches. BFL 1, FTC 0.

The calculator bit is an important one. For those not aware, BFL posted a calculator on its Facebook and Tumblr accounts, as well as its website and a few other official BFL pages, telling people they could see how much they could potentially earn with their rigs, based on the current difficulty level, exchange rate and how much electricity costs. The FTC says the calculator showed when someone would break even with the machine using the calculator. This is a problem, because since the machine never shipped, these calculations would equal an outdated and useless miner, if and when they finally got their machine. There�s also the fact that an employee of BFL has said they lied about how powerful the machines actually were, meaning the calculations outputted were always wrong, thereby misleading customers, a serious charge that will most likely be one of the main reasons BFL will crumble.

So, in the end, what is the FTC charging them under? The Federal Trade Commission�Act of 1914, a law President Woodrow Wilson signed to stop monopolies and unfair trade practices. Section 5(a) of the FTC Act, 15 U.S.C. � 45(a), prohibits �unfair or deceptive acts or practices in or affecting commerce”, which, as demonstrated above, BFL has done in fucking spades. Here’s the full list of violations:

I’d also like to add “Conspiracy”, just to see Reddit go insane.

AND, before we get to BFL�s rebuttal, let�s not forget that BFL Co-Founder and Innovation Officer Sonny Vleisides engaged in mail fraud by participating in a lottery scheme run by his dad that, internationally, netted $25 Million dollars from victims. He was still on probation when all this insanity occurred, so out of all of them, his odds are the worst.

His Prison name was “SonnyV”.

So…�What was BFL�s response?

Hilarity.

–BFL contends that the FTC is basically Dirty Harry, a good cop gone rogue because of their foaming at the mouth hatred of all things Bitcoin and Butterfly Labs, despite the fact that the FTC noted in its earlier report that the IRS has decided to let Bitcoin be counted as taxable property, and therefore okey-dokey.

–BFL called the FTC �Kafkaesque�, with the following footnote:

�From a certain point onward there is no longer any turning back. That is the point that must be reached.� � Franz Kafka, The Trial.

According to Wikiquote, that is actually from Kafka�s 1918 work �Aphorisms�. Also, the FTC is not acting Kafkaesque, its doing its job. The refund thing from earlier? That is definitely Kafkaesque.

–The first footnote, the very first one, is very adamant about how much the FTC is on a �Campaign� to �Destroy� Butterfly Labs. The quote that follows inside the footnote is as docile as an actual butterfly�s queef:

�We often see that when a new and little-understood opportunity like Bitcoin presents itself, scammers will find ways to capitalize on the public�s excitement and interest,� said Jessica Rich, director of the FTC�s Bureau of Consumer Protection. �We�re pleased the court granted our request to halt this operation, and we look forward to putting the company�s ill-gotten gains back in the hands of consumers.�

Considering the harm these guys have done to thousands of paying customers, that is as calm and reasonable as it gets.

–Despite the FTC�s pretty good explanation of what Bitcoin mining is in its first affidavit, BFL is claiming that THE MAN COULD NEVER UNDERSTAND THE BIGGER PICTURE, MAAAAAAAAN.

Because nothing makes sense if you don’t BELIEVE!

And here is the first page (of 2) from the FTC explaining the basics of Bitcoin:

I’d keep going to the next page, but I think I’ve made my point.

Moreover, their argument that the FTC’s claims don’t matter because they don’t understand Bitcoin (They do) is bullshit as well, because you don’t need to understand something to know its a scam. I don’t know a thing about chemistry, but when I see con artists selling juice they claim cures AIDS, I know that’s bullshit. We all know buttsex�is how you cure AIDS.

–I get a very weird Boston Legal-esque vibe from this motion to dismiss. It�s like some guy at BFL handed in a megalomaniacal rant about how the government hates him and his company to a lawyer, and the lawyer was like �I think I can translate this into legalese�.� Case in point:

… if he BOTHERED to pick up the phone, which I know must have been SOOOOOOOOOO HARD, then asked just ONE question about this thing they CLEARLY don’t know about…

That is an actual quote, from a real court document. That is so out-of-bounds rude for any case document I�ve seen in a while. Even the Whitey Bulger trial docs had class, and that guy ran the Winter Hill Gang! They based Jack Nicholson�s character from �The Departed� on him! Yes, that guy! This document is more offensive than Bulger�s trial, and the fact that he actually killed people is on public record, in pretty graphic detail. Depictions of bodies are less offensive than this motion to dismiss. I�m sure there are other motions on record somewhere with language this glaringly condescending, but I haven�t seen it. I think, side by side, this motion for dismissal�will be used to teach law students how to lose a case before the trial has even begun.

The main problem with the language is the condescension. It is clear that whoever wrote the rant that was translated into legal babble thinks he understands Bitcoin than anyone else, even Satoshi, and just KNOWS that no one inside the FTC could possibly understand such a broad concept as digital currency, because OBAMA.�I’d be willing to bet .000001 BTC that whoever decided to add condescension to their motion against the federal government’s case is probably one of the three main BFL officers listed in the original trial docs.

In fact, going through this whole document, it reads less like a professional defense of a company accused by the government of defrauding investors, and more like if you took the out of touch and not at all accurate legal advice from the comments posted on /r/Bitcoin, got said comments complied into one dump of quotes, and shipped it to a law firm with some of the more confident Libertarians standing in the room, bull-headed as ever, demanding their constitutionally protected day in court be as close to Perry Mason Syndrome as possible.

Yeah, guys, you could have TRIED to learn SOMETHING.

–They did ship some of their �Jalapeno� units, and, in fact, did ship other products as well. It isn’t disputed that some product was shipped. However, there doesn’t seem to be any documentation saying it was 45,000 units. There really isn’t any proof of that 45,000 unit number besides them just making it up. Note that there is no footnote, and there isn’t one on any other page mentioning that number. They are blatantly lying in their motion to dismiss against the FTC. I don’t know if that’s a felony or not, but I hope to God it is.

But that�s not the point. They very well may have shipped 45,000 units, but in the meantime they were refusing to refund customers, mining BTC with pre-ordered machines, not shipping paid-in-full units to customers, and then mocked said paying customers with those stupid foam pitchforks. According to�the FTC, BFL didn�t ship anything to something like 20,000 people who had already paid for their machines. �That�s the point: That they conspired to use customer funds to make equipment for themselves, and then ship it off to the customers when they were done. If that wasn’t their plan in the beginning, it certainly became their plan after, lets say, 2 days.

Via FTC.

–This:

Yeah, FTC, you could have at least TRIED to see we were already being sued for what you’re accusing us of doing.

Oh, so NOW the FTC wants to protect consumers, even though we were already being sued for our deceptive practices by someone else! They should have stopped us sooner! Well, it�s too late now, and that�s how law works, so I think were in the clear.

And for those wondering about the footnote, well�

If Plaintiff already knew about the District of Kansas putative class action when it filed its ex parte papers, it had an ethical obligation to inform the Court of the existence of that case.

Basically, the FTC should have known they were already being sued in Kansas, and by not putting that in their briefing they�re basically liars, even though the FTC did mention that there were �at least 2 lawsuits against BFL in the past, in its first report.

–They seem to have lost touch with reality. This, by the way, was the best part of their whole motion:

Y’know, on one hand, they’re calling us fraudsters, but on the other, they’re letting us back in the building, so we win, right?

I seriously cannot fathom the stupidity it must take to write that second paragraph.�BFL is basically saying �The FTC CLAIMS that we stole up to $50 Million dollars from thousands of customers, yet they let us reopen our doors! They must have finally opened their eyes to the future of Bitcoin! It was all just a big mistake!”

Lets explain: On September 23^rd, the FTC announced that, through court order, BFL was shut down through a Temporary Restraining Order, or TRO, on the grounds that the three main officers, Darla Drake, Nasser Ghoseiri, and Sonny Vleisides, respectively the treasurer, CTO and Innovation officer, had done all the fun stuff we�ve covered. Because it was so blatantly obvious that BFL was going to continue doing what it was doing (And, based on the language here, they DEFINITELY would, since they don’t seem to see what they did wrong), the FTC got a TEMPORARY restraining order, meaning that for a short period of time, operations would cease.

What they are contending in that second paragraph is that because a temporary restraining order lapsed, the FTC has no case. Because, as we all know, when time elapses on a legal matter� law.

There is absolutely no point to their contention here. Because the TRO ended, and the Judge decided he wasn�t going to renew it, they win. Because law.

We’ll be keeping track of this story, and any updates will be posted on our new main site, ButtcoinFoundation.org, or by following us on Twitter. Or don’t, I don’t give a shit.

The post An In-Depth Look at how Butterfly Labs is Going to Lose in Court to the FTC appeared first on Buttcoin Foundation.

Just like the title says. Logs and depositions are coming out showing how much BFL did to defraud customers, other companies, banks, and whatever else. Some highlights:

See below

HOW CAN I GET ONE OF THESE

I can single-handedly build a house faster than it takes for BFL to ship.

�Box of fans� is apparently an official BFL product

Yes what is �structuring�?

You can find more of these wonderful and amazing documents here and here.

UPDATED:

evilweasel posted:
interim order:

https://www.documentcloud.org/docum…17531-54-0.html

there’s a lot of boilerplate bullshit but the very short version is they can ship out already paid for and finished machines, provided the customer wants them and not a refund, but that’s about it, and in 35 days they can submit a business plan to try to let BFL continue as a going company. this order is the FTC getting everything they wanted, in practice.

the slightly longer version:

1)they are forbidden from taking pre-orders
2)they can’t even think about touching any money or property of bfl, except to turn it over to the receiver
3)every single ‘defendant’ (bfl AND three of the heads) must bring every asset they own into the US and disclose it to the receiver. every asset, not just ones they might have stolen from bfl
4)every single defendant must also provide a complete financial accounting to the receiver – again, of their personal stuff as well
5)the temporary receiver stays in control and can do whatever the fuck he thinks is best
6)bfl can ship machines to people who want a machine but not a refund

without an order from the court:
7)bfl is prohibited from “burn-in” testing
8)bfl CANNOT make refunds
9)bfl can’t make any new sales at all

now, they have 35 days to come up with a business plan that:
1)replaces burn-in testing or justifies and discloses it (and what they’ll do with the money)
2)protects customers and their refund rights
3)lets it keep going as a business

my money is on that business plan gets laughed out of court and the company gets liquidated

FCKGW posted:
from reddit:

There are some other intersting items in there
1) No refunds to be issued until audited financial statements are submitted to the court and calculation of assests vs liabilities. They only have 1.2 million in cash on hand and owe ?? from pre-paid orders wanting refunds. Likely to be calculated using the FTCs anyone who wants a refund can request one regardless of BFLs sketchy limitaions.
2) All holdings in Bitcoin to be converted to USD as soon as practical at sub $400 each probably
3) Work by BFL principals is unpaid
4) Business plan will likely require BFL to produce new miners upfront and sell only those units already produced.
5) The principal outside the US doesnt appear to be cooperating with the court / receiver
Seems highly unlikely that BFL and its principals have the capital to cover the liabilities re: refunds let alone front the cost to develop & produce new equipment prior to sale.

…! posted:
The entire order is fascinating. It freezes not just the assets of the company, but also the personal assets of Sonny and Jody. They basically have to ask permission from the temporary receiver to buy just about anything.

It also requires BFL to transfer all of their bitcoins to a court-operated wallet. They’ll be exchanged for USD, which will likely go to benefit the victimized customers. I wonder what the “my bitcoins literally cannot be taken away from me by any government unless I so choose” bitcoiners will make of this.

The post Butterfly Labs is fucked appeared first on Buttcoin Foundation.