Mt. Gox quits Bitcoin Foundation board

Mark Karpeles is the second high-profile departure from the foundation in as many months

Major Bitcoin exchange Mt. Gox has quit the Bitcoin Foundation's board of directors, the foundation said.

The move is effective immediately, the trade organization said in a brief statement issued Sunday.

"We are grateful for their early and valuable contributions as a founding member in launching the Bitcoin Foundation," it said. "MtGox Co. Ltd. (Japan) held one of the three elected industry member seats. Further details, including election procedures, will be forthcoming."

The foundation advocates for the digital currency as "non-political online money." Its mission is to standardize, protect and promote bitcoins.

Mark Karpeles, CEO of Mt. Gox and the exchange's owner Tibanne, was listed as a foundation board member and described as "the mastermind who created the current trade engine and the multi-currency platform for Mt.Gox."

Neither Mt. Gox nor the Bitcoin Foundation responded to requests for more information.

Mt. Gox did not issue any statement about the resignation. Meanwhile, all the tweets on its Twitter account have been deleted.

The foundation's announcement comes amid Mt. Gox's suspension of bitcoin withdrawals to outside addresses, which the exchange has linked to a technical issue known as "transaction malleability." The bug centers around the potential for fraudulent changes to bitcoin transaction records.

The weeks-long suspension has led to speculation in online Bitcoin forums that Mt. Gox may collapse. The price of bitcoin on the exchange touched a low of US$91 last week before recovering to $206 on Monday, far below $557 on other exchanges as quoted by CoinDesk.com.

The suspension also led to a small street protest outside the offices of Tibanne in Tokyo that lasted a week. Police arrived on the scene and ended the protest on Friday evening, according to the protesters.

"I'm hoping Mark is just under pressure to step down politically, but I'm not very optimistic," protester Aaron G, who did not want his last name used, said in an email. "Everything looks like a company who's about to go under to me."

Commentators on the online forum Bitcointalk were not surprised at Mt. Gox's departure from the foundation's board. One pointed to a petition to remove Karpeles that had been mooted on the foundation's forum.

"In the long run this is definitely a positive," another Bitcointalk participant wrote. "Anyone in the community for a few months knows that MtGox has been the weakest link in the frontline of big bitcoin businesses for a long time. The issue is how the general public and media will react in the short term."

"Mark Karpeles did the honorable and right thing for the circumstances," Andreas Antonopoulos, chief security officer with Bitcoin wallet service Blockchain.info, wrote in a message on Twitter. "I hope it is followed by good news and a recovery for Gox customers."

Karpeles is the second high-profile departure at the foundation in as many months. In January, U.S. entrepreneur Charlie Shrem resigned as vice chairman of the foundation after U.S. federal prosecutors charged him with crimes including money laundering in connection with the Silk Road online bazaar. Shrem has pleaded not guilty.

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Tags internetInternet-based applications and servicesMt. GoxBitcoin Foundation

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Tim Hornyak

IDG News Service
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