Bitcoin mining has always attracted ambitious entrepreneurs and questionable operators in equal measure. Few companies in the space have managed to disappoint customers quite like Butterfly Labs, a co
Butterfly Labs liquidated office assets on Craigslist in February 2015, selling over 20 ASUS Nexus 7 tablets from its Kansas headquarters address as the company's two-year financial collapse accelerated. The asset fire-sale highlighted the final stage of an operation that had collected millions in pre-orders for Bitcoin mining equipment starting in 2012, shipped minimal hardware, and faced multiple lawsuits and regulatory action.
Butterfly Labs announced ASIC mining pre-orders in mid-2012, promising October 2012 shipment at competitive pricing for devices that would generate Bitcoin faster than any existing equipment. More than 20,000 customers placed orders for thousands of dollars each. The company missed its October 2012 deadline repeatedly. Hardware originally promised in autumn 2012 didn't ship substantially until September 2013—an 11-month delay that destroyed customer confidence.
The Federal Trade Commission received over 500 complaints and obtained a court order halting Butterfly Labs' operations in September 2014 after determining the company had collected at least $20 million, potentially as much as $50 million, with minimal hardware delivery. Some customers alleged that Butterfly Labs deliberately withheld equipment to mine Bitcoin for company profit before shipping obsolete hardware, maximizing corporate earnings while customers waited unpaid.
In January 2015, Butterfly Labs reopened and announced refund programs offering customers three options: Bitcoin refunds, wire transfers, or cloud mining contracts. The cloud mining offer proved revealing. Butterfly Labs set a deadline for customers to elect refund methods; those failing to choose within the window automatically received cloud mining contracts worth the original payment amount. The contracts offered minimal earning potential—essentially transferring payment obligations into worthless futures obligations.
When media outlets analyzed the cloud mining economics, customers universally rejected the contracts as unviable. Butterfly Labs' attempt to dodge refund obligations through cryptocurrency-denominated schemes collapsed without generating revenue. The company faced settlement pressure from the FTC, leading to February 2016 settlement terms requiring full customer refunds.
By February 2015, Butterfly Labs was desperately liquidating office furniture, electronics, and equipment on Craigslist. The tablet sales represented assets being converted to immediate cash to fund refund obligations. Craigslist listings bearing the company's headquarters address documented the asset disposal—office chairs, laptops, and obsolete electronics being sold at liquidation prices.
Butterfly Labs' decline represented a cautionary tale about delay, false promises, and regulatory failure. The company operated for years accepting pre-payments for unshipped equipment before regulators intervened. By February 2015, the company was selling office tablets online to raise cash for customer refunds.
