Butterfly Labs Finally Has Wings Clipped UPDATED: Butterfly Labs Responds

UPDATE: Butterfly Labs has issued an official comment, which can be found in its entirety below this article.
The tale of Butterfly Labs may finally be drawing to a close. After unconfirmed weekend rumors that the federal authorities had raided Butterfly Labs’ headquarters, the FTC has requested and was granted an injunction, preventing Butterfly Labs from selling anymore hardware while also freezing its assets pending the investigation.
Butterfly Labs has been at the center of controversy nearly since its inception. Pre-ordered hardware almost always shipped late, leaving miners who had calculated profits based on energy consumption predictions, the hashing power of the hardware and Bitcoin’s predicted difficulty level in the cold. The problem was that when mining equipment arrived late, Bitcoin’s difficulty was higher and the profits Butterfly Labs’ hardware should have produced were impossible to realize.
This allegedly resulted in investments that should have brought large returns instead resulting in modest returns or worse, sharp losses. The order, which was first uncovered by the National Journal, states that there is good cause to believe that Butterfly Labs violated ‘Section 5(a) of the FTC Act’ and would be a threat to current consumers if they were allowed to continue to operate and would also be a risk at laundering their assets. As is typical in these situations, Butterfly Labs is required to keep all their records and FTC officers have been granted access to their grounds.

This post was published at Coin Telegraph on 2014-09-23.