Another chapter in the Butterfly Labs saga unfolds as the Judge Brian C. Wimes has approved a motion to transfer their assets to court control.
The motion was made by Eric L. Johnson, the temporary receiver in this case, on October 29th, and approved yesterday afternoon.
This motion has significant repercussions for Butterfly Labs. It allows the temporary receiver to manage Butterfly Labs’ assets, as well as administer their business operations. The court document outlines one of the temporary receiver’s specific duties:
The order also authorized the Temporary Receiver to “begin establishing an adequate cash reserve to cover potential refund liability. In this respect, and under the supervision of Temporary Receiver, the following actions may occur immediately…Conversion of Receivership Defendant’s substantial bitcoin holdings to cash on a systematic and reasoned basis.”
While the temporary receiver will be converting Butterfly Labs’ Bitcoin into cash, they will also gain control of all of Butterfly Labs‘ bitcoins. “The Stipulated Interim Order requires all parties to cooperate in transferring Receivership Defendant’s bitcoins to a Court-controlled bitcoin wallet, under the direction and supervision of Temporary Receiver.”
Butterfly Labs’ Future
So things are now officially out of Butterfly Labs’ hands. They had filed a motion last Wednesday, on the same day Johnson filed the above motion, for the court to dismiss the FTC’s case against them, claiming their case “fails to state a claim u pon which relief can be granted”.
Judging by the response to Johnson’s motion, Butterfly Labs seems to have the odds stacked against them.
They continue to maintain their innocence, claiming to be the first target of an FTC witch hunt against Bitcoin businesses. Their creditors, though, seem by and large happy that the case is unfolding as it is.
Butterfly Labs Loses Control
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