Bitcoin firm fights back against FTC

A company charged by federal regulators with running a massive scam is fighting back.

Butterfly Labs, a company that offered people a chance to cash in on the virtual currency bitcoin, filed a motion to toss out the Federal Trade Commission’s (FTC) complaint against it on Friday, it announced.

{mosads}“Since the filing of the FTC complaint, Butterfly Labs has been working to restart its suspended business operations as well as defending itself against the FTC’s media campaign claiming that Butterfly Labs is ‘bogus’ and its people are nothing more than ‘scammers,’” it said in a statement on Tuesday.

“Butterfly Labs vigorously disputes these claims, as well as the overall validity of the lawsuit.”

The company has accused the FTC of waging a war on bitcoins.

Last month, a federal court shut the company down at the request of the FTC, who said that it had bilked people out of tens of thousands of thousands.

Butterfly Labs charged people up to nearly $30,000 for its high-powered computers that “mine” bitcoins — the digital equivalent to minting the money. Bitcoins, which only exist digitally, can either be bought with cash or mined by having computers solve a complex algorithm

But the FTC claimed that Butterfly Labs never sent the computers to thousands of people who ordered them. Those that did receive the computers said the shipments were so delayed that the machines were practically obsolete by the time they got there.

Butterfly Labs also offered people the option to pay the company for time mining bitcoins, but the FTC claimed that it had not carried through on that promise.