Breaking Down the Butterfly Labs FTC Complaints Data

We dig into the data released along with 283 complaints to the FTC by Butterfly Labs customers worldwide.

AccessTimeIconMay 17, 2014 at 10:25 a.m. UTC
Updated Sep 14, 2021 at 2:07 p.m. UTC

Customers in 24 countries have made 283 complaints to the Federal Trade Commission (FTC) against Kansas-based mining equipment maker Butterfly Labs since 2012, as we reported earlier this week.

Since detailed information about notable companies in the bitcoin economy is thin on the ground, CoinDesk wrangled the data on two dimensions – geography and order value – to see what it could tell us.

A commanding 73% of complaints to the FTC came from US customers, most being from California, New York and Florida. Customers from Kansas, the company's home state, were absent from the list.

The complaints range across one and a half years from September 2012 through April 2014. Of the 283 complaints the FTC received, excluding one, 260 of them had an order value. The excluded item had an extraordinarily high order value of $30m and also didn't have a transaction date, so has been left out of the calculations.

The FTC data show that the order value attached to each complaint rose sharply last July and continued climbing rapidly through the autumn months, hitting about $950,000 at the end of November. This coincides with bitcoin's price surge that started in August when 1 BTC was worth about $100 and peaked in December when its value had rocketed to more than $1,000.

The cumulative order value of Butterfly Labs products in the data set is just over $1m.

The pie chart below shows how much is at stake for each disgruntled Butterfly Labs customer. Almost all their orders are valued under $5,000. Of those, the majority are worth less than $2,500.

There are always outliers, though. One Australian customer placed an order for three 'mini rigs', which cost about $30,000 each with an additional $588 in shipping costs. That's $90,873, all in.

"We were very surprised by the data," said Butterfly Labs' vice president of e-commerce and marketing, Jeff Ownby. "We have never been contacted by the FTC regarding any complaints it has received."

Ownby said his company analysed the data and concluded that it is an outdated picture of customer satisfaction.

Ownby said this was because the majority of complaints were filed before the bulk of its products were shipped on 1st Oct last year. Some 63% of the FTC complaints were filed before 1st October last year, after which 78% of its product shipped.

"We believe the issues raised [...] are largely a rehash of stale complaints that are no longer valid," he said. "It is our strong belief that the vast majority of the customers with delivery issues have been supplied with their miners. Other issues, related to pricing or refunds, are likely to be similarly resolved by now."

Image via MIT Opencourseware / Flickr

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Three Arrows Paper Trail Leads to Trading Desk Obscured Via Offshore Entities

As Three Arrows Capital collapsed under market pressure, its much-lesser known trading desk, TPS Capital, remained active, sources say. But a complex ownership structure might frustrate creditors' efforts to collect.

CoinDesk - Unknown
2
CoinDesk - Unknown
June Was Bitcoin’s Worst Month Ever

Plus, European crypto regulation comes into view.

CoinDesk - Unknown
3
CoinDesk - Unknown
What Traders Are Saying About Bitcoin's Biggest Monthly Loss in 11 Years

Poor macroeconomic sentiment, fears of inflation and systemic risks from the crypto market pushed the cryptocurrency below 2017’s highs.

CoinDesk - Unknown
4
CoinDesk - Unknown
Three Arrows Capital Files for Bankruptcy in New York Tied to British Virgin Islands Proceeding

A British Virgin Islands court ordered Three Arrows' BVI branch into liquidation earlier this week.

CoinDesk - Unknown