The Kansas City Business Journal is reporting that the judge in the Federal Trade Commission's case is allowing Butterfly Labs to continue business operations under court supervision. From the court order of Judge Brian Wimes:

"Plaintiff fails to show any continuing violation of the alleged misconduct. Plaintiff argues defendants' past conduct suggests they are likely to return to this business model and related representations in the future. But, as previously discussed, the court disagrees."

Butterfly Labs will be required to submit monthly reports to the court outlining progress in shipping products, processing refunds, and improving corporate governance. Other litigation against Butterfly Labs continues including cases in both Missouri and Kansas.