The Federal Trade Commission has filed a complaint against Bitcoin mining hardware maker Butterfly Labs, a Missouri-based company they claim have engaged in fraudulent and deceptive practices.

The complaint, as outlined on Ars Technica, alleges that one corporate defendant and three individual defendants - Butterfly Labs, Darla Drake, Nasser Ghoseiri and Sonny Vlesides - have taken in more than $50 million through the business by forcing customers to pre-pay for mining hardware.

Said machines were either never delivered or delivered so late that they had become obsolete. As of September 13, more than 20,000 customers still hadn't received their machines.

A separate six-page declaration by FTC attorney Helen Wong notes that once funds entered into defendants' bank accounts, they were quickly dissipated. What's more, there is substantial evidence that corporate funds were being used for seemingly personal use.

Listed examples include department stores, day care services, massages and home improvement. Furthermore, corporate credit cards were used for non-business expenses at department stores, gun stores and hunting stores as well as for auto maintenance.

Butterfly Labs pre-sold Bitcoin mining machines ranging in price from $149 up to $29,899 with pricing dictated by the machine's computing power.

Jessica Rich, director of the FTC's Bureau of Consumer Protection, said they often see that when a new and little-understood opportunity like Bitcoin presents itself, scammers will find ways to capitalize on the public's excitement and interest.